Debate on Annual Budget Statement

Order read for the Resumption of Debate on Question (17 February 2012),

"That Parliament approves the financial policy of the Government for the Financial Year 1 April 2012 to 31 March 2013.". – [Deputy Prime Minister and Minister for Finance]

Question again proposed.

12.32 pm

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Ms Jessica Tan Soon Neo (East Coast): Mr Speaker, thank you for allowing me to join in the Budget debate.

"A Budget for the Future", "A Carings Budget", "A thoughtful Budget" − these were some of the terms used to describe Budget 2012. I have had several dialogues and discussions in the last week with different business groups, residents and the online community on their reactions to Budget 2012. The Government's move in this Budget to pay attention to seniors, the disabled and lower-income Singaporeans and their families is welcomed. However, some feel that the Budget is not as inclusive as it did not address segments that they feel need support, given the high cost of living. These include the singles, the "sandwiched" class, the middle income, including retirees and those who live in private property but are not well off. Reactions to the measures to restructure our economy and managing dependence on foreign workers and support for SMEs were mixed.

The Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Budget 2012 outlined the directions for the Government to embark to build an inclusive society and a stronger Singapore. He outlined the principal focus of Budget 2012 to be one of addressing Singapore's longer-term challenges and building a better future for Singaporeans. The Deputy Prime Minister announced a whole range of economic and social strategies to achieve these goals centered around two key strategies: (1) Sustaining economic growth; and (2) Building a fair and inclusive society. Both these strategies are not easy to achieve but are critical for the future of Singapore and Singaporeans. I am glad to see the directions set out in this year's Budget.

In my speech today, I would like to touch on three areas: (1) challenges faced by companies as they move to restructure their businesses; (2) our growing income gap and how Budget 2012 sets out to address this; and (3) older workers and the CPF reinstatement.

A key concern for businesses operating in Singapore, both large and small, is the issue of rising business cost. Labour, rental and energy costs have driven business costs upwards quite significantly.

Many do accept the fact that there is a need to reduce the reliance on foreign workers. With easy access to foreign workers, wages of Singaporeans, especially the lower-skilled workers, tend to be depressed. There is also an increasing burden stretching the limits of our infrastructure with a growing workforce. However, there are worries of the shortage of talent and the tight labour market in the short term which will impact the ability of businesses to operate effectively and address opportunities. This will result in increased costs to businesses and lead to higher cost for consumers.

While the calibrated approach of reduction in the Dependency Ratio Ceilings (DRCs) and S Passes is understood, companies, especially the SMEs, will have to adjust and they will feel the pain in making the transition. So, while the implementation of the changes to the DRC has been calibrated to allow businesses hiring foreign talent time until June 2014 to comply with the new DRCs, companies will not be able to bring in new foreign workers beyond the new DRCs from 1 July this year. This will mean that adjustments must be done now and businesses and their plans will be impacted.

In many industries where jobs are taken up by foreign workers, these jobs are not necessarily the jobs that Singaporeans want. Many have cited that culture plays an important role in shaping the perception and desirability of some of these jobs. Many have expressed concerns on whether companies will be able to attract Singaporeans to do these jobs. In the ICPAS pre-Budget roundtable that I participated in, panelists felt that the current income and offerings in the service sector were less than desirable and more must be done together with appropriate polices to tackle these issues. To make a concerted effort and to accelerate these efforts to attract locals to the sector, recommendation was made to perhaps appoint a champion agency.

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For some industries, for the higher skilled jobs, the issue is whether Singapore is producing enough of the right skilled resources in time to fill the higher end jobs created as companies move up the value chain. In many business forums as well as in feedback from our members in the Government Parliamentary Committee (GPC) Resource Panel, who are from various industries, both SMEs and MNCs, a common thread we hear is that many experience difficulty in hiring higher skilled Singaporeans in their respective areas. The concern is whether our educational system is providing the relevant training that graduates and employers want. Is the economy able to accept these graduates in jobs that align to their skills as well as their expectations? A stronger economy for the future will require a skilled labour force. Hence, the greater policy concern going forward, especially as opportunities for pursuing tertiary education are increased in Singapore, is the employment of higher skilled Singaporeans and how they will meet the needs of businesses. While businesses will need to invest to develop their talent base as they restructure, there needs to be better collaboration between industry and educational institutions in meeting future skills needs of the various sectors.

Another point on foreign talent that came up in the various dialogues was around Professionals, Managers and Executives (PMEs) jobs and quality jobs for Singaporeans. Several expressed concerns of being "crowded out" of these PME roles, given the competition from foreign talent. While many agree that with the pace of growth and the focus on upgrading industries, Singapore must stay open to foreign talent. However, more needs to be done to ensure skills transfer and development of local talent for these roles and also a focus to reduce the heavy reliance on foreign talent.

To support SMEs to innovate and increase productivity, especially in the light of the economic challenges and the changes to the DRC, this year's Budget does have several welcomed measures. These include the enhanced Productivity and Innovation Credit (PIC) Cash Payout up to 60% of $100,000, enabling PIC payout on a quarterly basis, the ability to use PIC for in-house training without the need for certification, and the changes of qualification for R&D expenditures and software development, the One-Off Cash grant, the Special Employment Credit, and a few other measures. These will definitely prove useful and helpful for the companies, especially SMEs, in addressing the cost of doing business and enabling their growth.

What is important, however, is to ensure that access to these funds and support is simple so that companies that most need it are able to access it, and enjoy the reliefs and obtain the funds when they are needed. This is where I feel improvements must be done. As it is often said, while the policies and schemes are the right ones, the implementation and execution are important to achieve the intended results.

Let me illustrate this point with the PIC application process. Currently, there is quite a lot of information on PIC to help companies. This is, however, where the problem lies. There is a bit too much information for most companies to handle and they will require time to understand the vast amount of data available. Let me give an example. The PIC guide, " Productivity and Innovation Credit revised in 15th July 2011 ", is a 66-page guide. You will agree with me that you can probably write a book with this. The FAQs guide, " FAQ for PIC and cash grant ", is a 22-page document with 72 questions. The PIC forms in the IRAS website are not too difficult to fill. The challenge is in understanding the criteria which companies are required to check, validate and get the appropriate approvals from the relevant agencies against their other tax criteria. I think you get my drift now on the need for simplification. While promising small companies can and should tap the scheme, given their day-to-day operations and business pressures, they do not have the capacity to navigate the complexity of the application for the scheme.

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For companies to make the shift and to restructure as well, it is more than just a matter of cost. What will be required is also appropriate skills and expertise to enable the change and to drive innovation. Many of these companies do not have the relevant skills and expertise. Enhancing productivity requires companies to focus on systems, processes and technology to innovate and improve quality of products and services. It may be worthwhile to explore a pool of expertise that can be made easily accessible and the aggregation of demand would lower the cost to utilise them. Change management and business process re-engineering is also required.

Now, let me now move on to touch on the point of fair and inclusive growth. I would not be discussing the details of the schemes announced, but I would like specifically to talk about the point on the growing income gap and how Budget 2012 has set out to address income inequality, and the steps taken towards income, redistribution and preserving opportunities for Singaporeans and ensuring social mobility.

Singapore, as we all know, is small, is an open city and open to market forces. Like many other global cities like Hong Kong, London, Seoul, New York, we face the same challenge of the growing income gap. But I am glad to see the deliberate steps and position taken by the Government to address this difficult challenge of the growing income gap. As outlined by Deputy Prime Minister Tharman in his Budget Statement, he said, and I quote, "we cannot leave our social compact vulnerable to market forces. We have to do all we can to contain inequality and to sustain social mobility in each new generation. We are therefore making a determined, multi-year effort to raise the prospects of success for lower income families. We must also give our middle income families every opportunity to achieve their aspirations in an evolving and often unpredictable economic environment."

Education and jobs will continue to be levers for all Singaporeans to achieve success. And we must ensure that there are opportunities for all children and workers to qualify for quality education, training and jobs. This will need to be supported and sustained by Singapore's continued income growth.

The need as expressed in Budget 2012 is also to be targeted in our efforts. Although it is not perfect, it will in some way ensure that we keep our efforts for income distribution and preserve social mobility. As I have said earlier, many have expressed that it is not as inclusive because there may be groups that are less well-off that may need help, and I think we need to be cognisant of this and ensure that they do get the help that they need, but we need to ensure that Budget 2012 stays targeted so that the groups that need help do get it. I am glad to see that the Budget while targeted in its approach, it does attempt to broaden the reach of the schemes to include the lower end of the middle-income group who may not be as well off.

Let me give Members some examples. The GST Voucher Scheme, which is based on income and the annual value of homes, does include Singaporeans living in the lower end private properties. The annual value criterion which is capped at $20,000 covers about 15% of private properties. I would ask that the Ministry consider the suggestion and feedback to refine the Medisave component of the GST Voucher to include those 60-65 years of age. Given the concerns of the rising cost of healthcare in our elderly, many in this age group who are already out of the workforce may not have sufficient provisions for their healthcare needs and require help.

The absorption of the GST and increase in subsidies for long-term care, including community hospitals, nursing homes, day care and rehabilitation facilities and home-based care packages will enable more in the middle income group to also benefit. Those who previously did not receive any subsidy will now be able to do so. MOF has also indicated that with these changes, 80% of elderly or two-thirds of Singaporean households will qualify for these subsidies. This will indirectly help their family members who are taking care of them and paying for their medical expenses.

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Similarly, the schemes introduced to support Singaporeans with disabilities are welcomed. The measures on early intervention and education will benefit some 2,000 children, and supporting employment will enable more Singaporeans with special needs to participate. Adult care and subsidies for adult Singaporeans with severe disabilities will also enable middle-income families to offset about 50% of annual cost in attending Day Activity Centres while lower-income families will benefit more.

These measures, which I have highlighted, show deliberate steps to redistribute income and help Singaporeans cope with increasing costs while ensuring financial viability and sustainability of the programmes. Many of these measures are not one-off for the year and the Budget has put schemes with specific funds set aside to ensure financial stability and sustainability. For example, $3.6 billion has been put aside for the GST Voucher Fund, $2.3 billion for the Special Employment Credit and Top-up of $200 million for the Edusave Endowment Fund.

While I share the concerns of businesses of increasing cost of doing business with any increase in labour cost, I must say that I am glad that finally, we are raising the CPF contribution rates of older workers. CPF contribution rates for older workers were lowered in the late 1980s and, again, in the 1990s. The then seniority-based wage system discouraged employers from hiring older workers as the seniority based system at the time made the older worker more costly to hire than the younger worker. With the focus on productivity and the flattening of the wage system to one focused on performance, it is now only fair that older workers are recognised and rewarded for the work that they do. I personally find it hard to justify why any older worker is paid less just because they are older. If they are able to do the work, they should be rewarded for the same as any worker, young or old. On the recommendations for the rise in the CPF contributions for older workers, I would also encourage the Government to consider extending the CPF contribution rates for those above 65 years who can and are working.

Our economy today is dependent on services rather than manufacturing. And, hence, productivity while it still entails getting things done faster in a shorter time does imply the need for experience and knowledge. So while an older worker may be physically slower in some instances, it does not necessarily mean that they are less effective than their younger counterparts. Let me give you a very simple example. Take going into a store or going into a restaurant as an example: the quality of the service you receive from the service personnel really depends on their knowledge of the products and services and their ability to understand and match your needs and then to follow up and give you the products and services you require. The ability to complete the transaction in the shortest time and to provide you with a quality customer experience need not mean that each step must be done in the shortest time but rather the ability to complete it in the shortest time accurately. With older workers better educated and having more experience, their ability to provide good service and to understand customer needs will be strong. Their ability to retrieve products, input the service requirements or complete the order quickly can be assisted with suitable technologies to check stocks or to scan products or to use portable input devices to input service requirements.

We must recognise that there still exist perceptions and sometimes biases that older workers may not be productive as compared to the younger workers and it will take time for such perceptions to change. While the CPF contribution rates are increased, having the Special Employment Credit (SEC) in place will encourage employers to continue to employ older workers and keep them in demand in the employment market. Together with schemes like PIC and the restructuring of work to leverage the use of technology and automation to be less labour intensive and to improving the work processes, all these will enable older workers and disabled workers to be more effective and equally productive.

I would like to share a recent example that I was fortunate to come to learn about during the course of my commercial work. This is about a company that restructured their business processes and policies to address their business challenges to enable their workforce to be more productive. This company is called Eureka Call Centre Pte Ltd. Eureka Call Centre is a 30-seat Call Centre. It was facing high staff turnover and was not able to run its operations effectively. In 2008, it decided to embark on an ambitious re-engineering project. Eureka decided that they would run a Call Centre with call agents who were visually impaired. In 2009, they started with their pioneer batch of visually impaired call agents. They currently have 16 persons with physical disabilities (PWDs) and intend to recruit 12 to15 more every six months. They benchmark themselves with Call Centres that have able Call Agents and they set their KPIs at 10% higher than able Call Agents and aims to have their Call Agents to be more productive. They have been successful in achieving these goals. And their Call Agents handle an average of 30% to 50% more calls than able Call Agents. They are able to do an average of 16% higher talk time per hour. They were able to achieve this by re-engineering of their work processes and providing technology to enable the PWDs and the visually impaired workers do their work effectively. The User-Interface was re-programmed: they use technologies like hotkeys as shortcuts, voice synthesizers for the totally blind, screen magnifiers and high contrast displays, and real time monitoring for supervision, training and barging.

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While they pay their agents competitively, they also realise that their needs to socialise and have outings was really what they valued. Job security and continuity were also important. They had the appropriate HR policies to align to the needs of their staff and they were able to retain a highly motivated staff as well. On that point, I would say that the Special Employment Credit that is in place, 16% for employers who hire SPED graduates, regardless of age, is definitely welcomed. I do ask if the Minister could consider extending this to include the employment of all disabled workers.

Would the Ministry also consider refinement of the SEC for older workers to not be capped at $4,000 a month? With a large proportion of our workforce who are PMETs, this will encourage employers to hire older PMETs. Currently, they are the more vulnerable group in our workforce when companies make decisions to downsize or restructure their businesses or operations.

Mr Speaker, Sir, Budget 2012 is a Budget for the Future, a Budget that as Deputy Prime Minister Tharman has emphasised, sets out our direction and takes significant steps towards building an inclusive society and a stronger Singapore. He aptly summed up his Budget Speech with "Opportunity, improving ourselves, compassion", saying that this sets the tone of the character of the society that we want to build for all Singaporeans and a place that we can be proud to call home. This is the Singapore that I am proud to be part of and I hope that you will be too. With that, Mr Speaker, I support the Budget.

12.52 pm

Mr Baey Yam Keng (Tampines): Mr Speaker, Sir, I thank you for allowing me to join this Budget debate. This year's Budget Statement heralds significant changes in our priorities as a nation. In the past decade, as one financial crisis after another hit our shores, our focus had been on mitigating the impact. Keeping and creating jobs were paramount. We had pulled out all stops to bring in new investments. Our efforts had paid off. Singapore has been topping international rankings, including those by the World Bank, as the easiest place to do business for the last few years. Investments have been propelling our economic growth and wealth creation.

However, not all Singaporeans could catch up and benefit from the changes in our job environment. Our income gap has widened. It is appropriate that we now implement measures to recalibrate. This new Budget seeks to build a more inclusive society by redistributing some of the new wealth to the poor and needy, elderly and disabled. In addition, to preserve the character of Singapore society, the Government has decided to reduce our dependency on foreign workers and slow down immigration, even though this may mean slower growth. We must be prepared to pay more to attract Singaporeans to redesign jobs in sectors where foreign workers make up a significant proportion of the staff.

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We are well aware that this move will result in higher costs in a few areas which will ultimately hit our own wallets. Nonetheless, we can derive a sense of comfort, assurance and pride from knowing that it is a fellow Singaporean who had just fixed our laptop, took our order, cooked our lunch, and drove us to work; it is a fellow Singaporean who will be here with us for the long haul, not a transient worker; it is a fellow Singaporean getting decent pay to support his parents and children. This is what it means to be part of a nation tribe. In a world of over seven billion people, just over three million are Singaporeans. We are a very small tribe. Hence, all the more we should look out for one another. It is no longer as important to race ahead at all costs as to make the journey together as one family, slowing down now and then to check on the weaker members and ensure that they do not fall too far behind.

The measures to improve the conditions for older workers in employment send a good signal that while we should not expect to be paid more for seniority, we should not discount a person just because he or she has more grey hair or, for that matter, less hair. It is not what is on the head, but in the head that is more important. However, I would like to remind us that just because these measures and the push to reduce dependency on foreign workers are announced together, we are not expecting senior citizens to take on all the displaced jobs of foreigners. Jobs will certainly need to be redesigned to increase productivity and people's mindset need to change too to learn new skills and venture into new careers.

There is dignity in every job and in making an honest living, but there will be jobs that will be difficult to find enough Singaporeans to want to do and I will be happy that fellow Singaporeans need not take on these jobs and can find better ones. To me, these would include jobs of the construction workers and cleaners. There will also be professions that our local population will not be big enough to provide enough people to meet an increasing demand. For instance, the healthcare sector. I am glad that by 2020, the number of beds in acute hospitals will be increased by 1,900 beds and in Community Hospitals, 1,800 beds. How many more doctors, nurses and allied healthcare workers do we need? I support the move to improve conditions to attract more people to join the healthcare sector, but given that our population is not going to increase much further but ageing rapidly, how many can we attract or displace from other sectors? How many can our educational institutions train in time to meet the demand?

I find that the reduction in the Dependency Ratio Ceilings (DRCs), although calibrated, when applied across the whole manufacturing and services sectors, is too blunt a tool. I urge the Government to look into the needs and characteristics of specific industries and adjust the ratios accordingly. I am suggesting that for a start, cleaning, construction and nursing sectors be given more leeway to employ foreigners.

Mr Speaker, on the topic of foreigners in Singapore, over the past week, I have had some very direct responses from many Singaporeans regarding my comments over a remark made by a foreign student on a Singapore scholarship. I am grateful to many who understood where I was coming from and accepted my explanation. I am mindful that there are some netizens who are out to discredit whatever views to pursue a certain agenda, and that online comments do not necessarily represent the public opinion comprehensively.

In trying to give the benefit of doubt to what the student said, and attempting to soothe the hard feelings of some Singaporeans, I was accused of siding with a foreigner and not standing up for fellow Singaporeans. It was never my intention to undermine Singaporeans but to those whose feelings my words have hurt, I am sorry. I reflected myself and this is my learning: I do not think that we can just treat all the negative sentiments against foreigners as noise and expect that people would just learn or have to be rational.

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A message to my Facebook account yesterday reads, and I quote:

"Many Singaporeans are very angry that the government has been giving free rides to foreigners €¦ Many students €¦ are given the red carpet treatment in Primary and Secondary schools. The government woos all the 2nd tier and 3rd tier students €¦ (the 1st tier students normally do not want to uproot themselves), give them scholarships and money to cover their expenses, so that they will uproot and come to Singapore, ... And when they do get here, they (are) given further privileges by the government moving them down 1 or 2 levels in their respective schools €¦ The excuse the government gives is that these people need to catch up on English. However, this gives the foreigners an unfair advantage over Singaporeans because they are 1 to 2 years ahead of the Singaporean kids in their standard, in terms of maturity, knowledge, intelligence €¦ They end up getting better results than Singapore kids. Many eventually get scholarships in post-secondary education as well in university education, at the expense of Singaporeans. The government has not been fair to Singaporeans at all. Double standards exist in favour of foreigners. Singaporean commoners do not get scholarships, but foreigners with such an unfair advantage, have scholarships thrown at them €¦ It is time for the Singapore government to put its citizens first €¦ How can Singaporeans be treated as 2nd class citizens in their own country ??? And that is how many Singaporean commoners feel."

Sir, I have skipped some very harsh words and phrases but I believe I have not paraphrased out of context. I do not know how many Singaporeans feel this way even though I know not all the points raised are factual, but suffice to say, there are such feelings among Singaporeans that the Government sometimes seems to place more emphasis on foreigners or prospective Singaporeans. When I was studying for my "A" levels, I was sent to an ASEAN scholar class. About a third of my classmates from Malaysia and Brunei joined us during the June holidays of our first year. They used to study the various subjects in their home country in Malay and had to catch up with the rest of us not only in the language adjustment, but also six months of curriculum. I was impressed with their diligence and many did well eventually. Some have settled down in Singapore and have given our country our new sons and daughters.

Over the last 25 years, the number and proportion of foreign students have increased. And because we only want to attract quality students, many of them competed against Singaporeans in examinations, competitions, sports, arts and scholarships. Unfortunately, there will always be black sheep in every community, any misbehaviour is easily amplified and this tarnishes the reputation of foreigners.

This presence of foreigners is also evident outside the schools. We used to have expatriates working and living in Singapore, and sometimes they tend to socialise within specific communities and spaces. Now, it is a good thing that foreigners are living in HDB flats, taking public transport and eating at hawker centres. They are better assimilated in the Singapore society. When I was living in London, I believed there were more of us foreigners in central London than the local British, but they lived in the outskirts or other smaller cities, towns, or villages where the population there is more or less homogeneous. However, Singapore does not have the luxury of space, and whether we are in Jurong, Queenstown or Tampines, we squeeze with more or less the same people queuing up for buses and taxis, or rushing to get into the MRT trains. We have to understand that when it is a daily experience of having to fight for places or space, people are naturally tested for their patience and emotions may run high. People felt squeezed out in their own homeland, not only for seats in the train or for vacancy in the school, or university, or for resale flat.

Mr Speaker, I would also like to highlight an interesting phenomenon in Singapore. Most of our new immigrants or foreigners working, living and studying in Singapore are from China. Most would expect that since the majority of Singaporeans are Chinese, there will be a natural fit. However, among the Chinese, we would be able to identify a different language, accent or slang in the way we speak. Hence, we might even be more conscious of the differences among us. I believe it could be a similar situation within the Indian community. As a non-Indian, I cannot differentiate between Tamil, Hindi or any Indian dialects, but I believe some Singaporean Indians would be able to tell from a glance whether someone is from northern India or southern India. Therefore, there is a certain dynamic within seemingly identical ethnic groups and sometimes, this leads to tension.

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However, we cannot afford to be xenophobic given that the world is getting smaller and that talents are global, including Singaporean talents. NBA star Jeremy Lin must be the most newly-famous American now. Through his hard work and talent, he is a shooting star in the basketball arena and an inspiration for many, not only Chinese worldwide, but the world too, including Americans of all races. I am sure when his parents migrated from Taiwan to the United States, they would have struggled settling down in a foreign land. Even when Jeremy grew up in an American environment, he had suffered prejudices and I read that he has been called names like "wonton soup" and "sweet and sour pork". If he had not persevered, he probably would have become a volleyball or a table tennis player. If we care too much about what people call us, we will find it difficult to be more than a stereotype or an inaccurate label. Let us be confident and quietly proud of ourselves of who we are.

Mr Speaker, Sir, just as this Budget has set the broad direction to develop Singapore as an inclusive society, we must be mindful of what may tear us apart. I have learnt that no matter what my intentions may be, I need to be mindful and be more sensitive of what people might read into certain words. Likewise, in our policies and the way we implement our policies, we must be mindful of how people may perceive them. We need to communicate more and engage better. If a policy was not well received, let us try different ways to create a dialogue and explain our thinking. But we must always remain open to change a policy when necessary. We may want to persist in our argument that it is for the long-term interest, but we need also to demonstrate immediate benefits. We should not win a battle to lose the war, but we should aim to sort out any dispute before escalating to a confrontation. With that, Mr Speaker, I support the Budget.

1.04 pm

Mr Zainudin Nordin (Bishan-Toa Payoh): Thank you, Mr Speaker. Sir, I see Budget 2012 as a response to new economic, social and political realities facing Singapore. The Government should be congratulated for taking these changes into account, and with Budget 2012, we are better placed to address concerns of many Singaporeans, particularly those in the lower income brackets. I wish to focus my current comments, and those that I intend to make during the Committee of Supply debates, on this latter group of Singaporeans – those from the lower income and less skilled groups.

This new, inclusive approach of the Government in budgeting is a positive move. By allocating more funds to help the elderly, the needy and the less able, the Government is acknowledging that some groups of Singaporeans need special attention. I hope that in our upcoming debate, we will continue with this approach, and allocate the Government's budget to address current and immediate concerns of less fortunate Singaporeans.

To start with, Sir, I am deeply concerned with the plight of older and less skilled workers. I accept the Government's argument that the best and the most sustainable way to raise incomes is by improving productivity. And this comes through upskilling and use of technology and even processes. This approach is well and fine for many workers, but perhaps not so applicable to those in the lowest rungs of our workforce. Let me give you an example. Recently, I was approached by an elderly man, in his late 50s, approaching 60s. He works as a cleaner in a small company. To his credit, he said that he had heard a news report that his income could go up if he could improve his productivity. Then he asked me how he could go about improving his productivity. Honestly, it is not an easy answer. Because while I could tell him to attend a course to upgrade himself, or learn to use the cleaning machines, I knew that his company, which is a small one, was not going to send him for many courses, or buy many machines. For him, there would be a difficult way up. At close to 60 years of age, he struggles and is unlikely to learn a new trade. Realistically, he is unlikely to find a new job, even in more progressive cleaning companies. So, the Government's call for workers to improve productivity was irrelevant to him. This is not an uncommon view among workers in the services sectors like cleaning, health care, F&B, retail, etc. To these workers, in these sectors, it is all good and well to throw a big word like productivity at them, but they still struggle to come to terms on how it will really make an impact in the way they work, the salary that they earn and the career progression that they may have.

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Sir, this is just one example – workers in many small companies in Singapore may be in the same situation – and my point is that at the macro level, it is reasonable to talk about improving productivity as a way of improving incomes. But at the micro level, we must have a more meaningful discussion about how individual workers can hope to raise their incomes, so that they too can benefit from the results of Singapore's progress.

I believe that we have not fully recognised the plight of the low-income workers and particularly so, the plight of older and less skilled workers. I urge the Government to place some emphasis, using the power of whole of Government, to look at how we can improve the lives of this group. While I am sure that they appreciate the rebates, the vouchers, and so on, that the Government offers from time to time, I think that there is a need for a closer examination of where each dollar of a low-wage worker earns goes to. A question that I would like to ask is: how much of the earnings of the low-wage worker go to paying direct and indirect government-related taxes, fees, charges and the like? If we do have some sense of the reality, we could consider options that are more effective in helping them cope with the challenges that they faced. Like, what scope exists to reduce these charges, for example? My logic is that a low-wage worker's standard of living can be improved not only by increasing his income, but also by reducing the cost of his living. I believe that now is the most opportune time to look at this issue because, in fact, our Minister for Manpower is also the Minister of Finance!

Sir, I accept that the issue of housing for low-income workers is a complex one too. I have previously suggested that the HDB look at managing the sale of 3-room and smaller flats differently – totally different from the way we do it now, so that poorer households can buy or rent homes at an affordable price. Today, I would like to suggest even more bolder and radical ideas to the Government. One idea is for HDB to consider selling homes on shorter leases – say 50 years or 60 years lease, for example – for Singaporeans with lower incomes and limited financial resources. HDB can put further restrictions like recovery of subsidies on sales and buy them back at a cost-plus basis. This can remove speculation of 3-room or smaller flats, and revert the HDB to its original mission of housing a nation. If we make enough effort, I am confident that we can think of a scheme to reduce the start-up burden on low-income families and even young families, and they can be assured of a roof over their heads at a reasonable price. This would be another way to reduce the burden of cost on low-income workers and also for young Singaporeans.

Next, Sir, beyond the low-income workers, I also wish to focus and discuss on workers in general, and whether our education and training system is preparing our students for the work life. We know that Singapore's brand and reputation on education is well-known far and wide. Our schools and tertiary institutions are ranked among the best in the world, so I think it is only reasonable to expect that our young people, having attended these schools, should be highly productive. Yet, when we talk to our businesses, this does not seem to be the case. They find school leavers to be book smart, but not street smart. They seem to know how to behave in a classroom, but not in a workplace. And they seem to lack a hunger to excel and are demanding in their expectation. I am not sure what the cause of this apparent gap is. Is it because we teach what is not exactly relevant to what the businesses want? Or is it because we teach theoretical principles, but not how these will be relevant in the workplace? Or does the issue lie with the students – after being told to study hard, work so hard that they can get comfortable jobs, they think that getting a degree means that they have arrived. Perhaps, it is true that they have arrived, but they need to accept that they have only arrived at the start of the next phase of their lives – where they can only achieve their aspirations through continued hard work!

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Another point that we must consider is the difficulties that some of our workers face in retirement. Sir, we have received much feedback about the elderly in my housing estates who are very concerned about their retirement and employability in their old age. I was, in fact, very encouraged when the Government, in the past few years, was discussing ways to improve the returns of the CPF balances. It is good that the Government has decided to grant a higher interest rate for the first $60,000 of the CPF balances. But I am asking if there is a possibility for us to do more and give more whenever gains are good. We are aware of the magic of compound interest. For example, if you have $1,000 balance in your CPF account, at an interest rate of 2.5%, over 30 years, it will give you $2,098. But we know that if this interest can be better, the gains can be much more. Now, imagine if you are able to achieve an appropriate interest rate that is viable and also sustainable, this would mean that our retiring workers can look forward to more resources at retirement and little more comfort, after helping Singapore grow and prosper. It would also mean that they would be less reliant on the Government for their needs in later part of their life. It may be opportune time for us to relook at the interest rates of CPF accounts of Singaporean workers for their long term benefits. It is also timely, Sir, I think for us, as a whole of Government, to see how we can maximise the contributions of all in our workforce. Sir, allow me now to speak in Malay.

( In Malay ): [Please refer to Pg 1399 for Vernacular Speeches.] Sir, perhaps it is timely for Government as a whole to look at how we can use the potential and abilities of Singaporean workers so that we can maximise the economic contributions of all our workers. This means that each Ministry and Government institution will have to work together to educate our students and inculcate a deep sense of social spirit so that they have a continuous desire to excel, work hard to attain a higher standard, possess the desire to learn on the job, and, hopefully, when they have done well, they will continue give back to society and the less fortunate.

( In English ): I think we must elevate our Budget discussions, sweep the slate clean and think from the overall macro perspective of how we can improve the lives of Singaporeans. While making routine cuts to address the issues of particular segments of our community has its place, we should spend more energy looking at how the Government's Budget is allocated. For example, if buying one less jet fighter means we can help hundreds of poor families take a step out of the poverty trap, is it worth the sacrifice to our national defence? Or if we build one less national park, but can help hundreds of poor students learn some work-life skills, is it worth the sacrifice? This is just my layman way of thinking, but I think we in Parliament have a duty to examine our Budget allocation, and assure ourselves that, overall, we are doing justice to all Singaporeans.

Mr Speaker, Sir, Singaporeans can be justifiably proud of our many "Number One" accolades or being among the "Top" in the world. Our physical infrastructure rivals the best in the world, we have a Number One port and airport. Many tall and magnificent buildings grace our skyline. Now, with Budget 2012, we are presented with the opportunity to be Number One in another, perhaps more important, area.

I would like to propose that we work towards being Number One in helping our fellow Singaporeans, particularly, the most vulnerable amongst us, to achieve a better life: a better life through good education, a meaningful and fulfilling work-life, and a dignified and happy retirement. That would be a proud achievement indeed.

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1.15 pm

Mr Inderjit Singh (Ang Mo Kio): Sir, clearly, this year's Budget has managed to address the needs of Singaporeans who were most affected by the Government's past economic growth strategies, especially the older aged workers and the lower and middle income groups. Where previously they were most affected by stagnant or slow wage growth, they are now assured of some form of a safety net to help take care of their needs.

In healthcare, for example, I welcome the additional spending tabled in this year's Budget. Singapore spends far less on healthcare as a percentage of GDP when compared internationally. According to the World Health Organization's data, Singapore's total spending on health was only 3.3 % of GDP, lower than most developed economies such as US, UK, Japan and Korea, who spend between 6.5% and 15.2% in the case of US, and also lower than developing countries like China, India, Malaysia and Thailand, who spend about 4.1% of their GDP on healthcare. In fact, Singapore's spending on healthcare is only about half of the global median of 6.1%. So, the additional spending this year is a welcome move.

The GST Vouchers that the Government extended in this year's Budget were another good initiative. Previously, the Government would extend one-off GST credits but it still did not remove the anxieties among low-income Singaporeans as it was always viewed as a temporary scheme. So, the GST Vouchers, as a permanent assistance will provide more assurances and give many a peace of mind that they will get help regularly.

I am glad that the Government has realised that the widening income gaps will not go away anytime soon and therefore the increase in spending for basic things like education, healthcare, housing and transportation. However, while I am happy that the Government sees that it needs to play a bigger role in helping Singaporeans, we should not adopt a western style welfare system for obvious reasons, as we can see from what is happening in Europe today.

Therefore, we must have a more permanent way of improving the wages of Singaporeans so that they can still be better off despite shouldering some of the high costs that we see here in Singapore. Inevitably, we may have to move to some form of a Government-supported minimum wage system in the initial years, as I mentioned before, to be taken over by Productivity Improvement.

I am not suggesting minimum wage fully on the burden of employers, because they are already facing high costs, but to be shared by the Government. What I am suggesting is that we should start thinking about a wage that is reasonable, for the Government to support in the short term. This will give employers time to restructure in the long term and they can only do that by productivity improvements. This will shift the future cost of the minimum wage to companies as the Government cannot be seen to be supporting this forever. If the company fails to restructure in five years, for example, then it should realise that it may not be able to compete in Singapore in the future and will slowly fade out. This higher salary will also be one way to help our employers manage a tightened labour market as the Government reduces the intake of foreign workers as it will help attract the Singaporeans who are not currently working due to low salaries to re-enter the labour force. We should no longer accept low wages for our workers, like the $600 that our Singaporean cleaners earn. It is just not fair to them.

Sir, just like the vulnerable in society that need help, similarly our SMEs are badly affected by the double whammy of rapid costs increases and a tight labour market due to the Government's restructuring efforts. SMEs should therefore need more help and the Budget could have done more and to be a more inclusive one for them.

Today, the strategy of creating a productivity-led growth is not wrong but once again the Government is adopting an "instant tree" mentality of expecting everyone to make progress overnight. Business models take time to change with productivity improvements taking a longer time to set in and therefore the Government should be more realistic at the pace of change of the economic restructuring as in the short and medium term, we will be penalising our SMEs with higher labour costs.

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In the past, the Government was too liberal with our foreign worker policies, opened the gates for too many foreign workers to come in and now when we realised the economic and social problems have been created, we are taking the other extreme and completely turning off the tap. This is not the right thing as companies need time to adjust to a tightening labour market. According to the team of economists from the Lee Kuan Yew School of Public Policy, if Singapore were to achieve a moderate economic growth for this decade, there needs to be about a 1.5% employment growth even if we meet our productivity targets. Singaporeans alone will not be able to meet this job growth rate and therefore, at least in the medium term, companies here will have to turn to foreigners to supplement this. Hence, turning off the tap too drastically now will kill off the much needed labour supply for our companies and to grow our economy in the near term.

One area which is a huge concern for companies is the cost of renting or owning industrial or commercial space. The cause of this can be traced to a policy shift by JTC. Traditionally, JTC was very firm in its industrial land policy being only available to companies here for designated uses and at subsidised rates. In recent times however, JTC has offered their industrial land to REITs and other private developers, and these are now being redeveloped into strata-titled industrial units which are rented to non-industrial tenants for higher yields, and as we read from the papers recently, these are rented out for child care centres and even religious organisations. I recently spoke to some SME owners, who are tenants of a JTC development in Toa Payoh, which is now operated by a leading private property firm. Some of the tenants are now negotiating a lease renewal with the landlord and face a substantially higher rent at about 40% increase from what they were paying earlier. In a recent Business Times report on the same issue, it showed that some SME owners were quoted as paying as much as 56% higher rent when they renewed their leases.

Sir, this is clearly an industrial policy gone wrong. We should never allow industrial land to be used by investors. Now what has happened is that genuine companies who need the industrial land have to pay way beyond what it should be and therefore cannot survive as they cannot compete with similar economies such as Taiwan, Korea or Malaysia.

JTC should review this policy and go back to being a direct industrial landlord. The current JTC policy has created a major impact at the bottom lines of companies. In fact, JTC should practise a differentiated land pricing policy because pegging industrial land to market rates in Singapore is not realistic and we should in fact be comparing what similar companies in our competing economies are paying and pricing industrial land based on that – so that our companies can compete effectively with these economies.

I was disappointed that this year's Budget failed to address the shorter term problems faced by companies especially in the area of high business costs. Although the Budget included a one-off SME cash grant, capped at $5,000, this is insufficient to help SMEs, especially those have been in operation for some time. The Budget should have instead considered offering a tax rebate pegged against a proportion of a company's income so that this is more reflective of the size of the company. But there is a lot more that the Government can do in addressing the cost issue.

In theory, the measures implemented in the Budget to boost productivity may be sufficient but, in reality, many of the smaller companies may have trouble implementing them. They may not have the resources to focus on productivity for now as they are fire-fighting with the high costs and so the Budget should have looked at helping them in the short term with this cost problem. As such, many smaller companies may not even benefit from the productivity schemes as they may not qualify for them at this stage.

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In the area of entrepreneurship promotion, I have bigger worries. The issues of high business costs and the availability and price of foreign labour may actually affect the number of start-ups that we see in Singapore. Moreover, for start-ups, the productivity related incentives do not mean much as they will not have a significant top line revenues and they will not benefit from the many productivity schemes that are pegged at pegged incentives.

So, the question we must ask is why did cost in Singapore rise so rapidly, beyond the rate of growth of incomes of Singaporeans and beyond the rate of growth of company profits? This can be attributed to the market driven pricing approach taken by the Government and its agencies. The Government has, many a time, been quick to increase the various charges, allowing costs to escalate, immediately upon a recovery of an economic recession. Each time this happens, we bring the cost base higher without an opportunity for cost reductions. This has led costs to unrealistically increase faster and more than profit and income growth of Singaporeans. If fact, in the 2008 recession for example, the worst was in the property market where we continued to see real estate prices increase despite the recession and this was because of our liberal policies on capital inflows. There are many foreigners who invested in Singapore. While the Government should not interfere in the private market except to curb speculation, it could have done a lot in the HDB market had it not pursued market driven pricing. Also market driven pricing has created huge cost burdens and will potentially edge out many of our SMEs because of squeezed margins.

While the Government has kept corporate taxes relatively low, and this is a good thing, there are other high overheads that companies here face that add to their high operational costs and erode their profits. There are many hidden taxes – GST is one, high levies for foreign workers, a series of duties and taxes on utilities, transportation costs such as COEs and ERP charges and many others that add to escalating business costs. Similarly, Singaporeans are left with little disposable income as they pay for higher HDB prices and also their share of higher taxes and levies. The Government should review all of these to see which could be removed or adjusted because these built-in taxes and high operational costs cream off the profits for our SMEs and lower the disposable income of Singaporeans. As suggested by Prof Tan Khee Giap and his team in an article in The Straits Times dated 4 January this year, "this approach of re-pricing Government services may lead to lower revenues or bigger subsidies for statutory boards, ministries and Government-linked companies. But it will also translate into higher income and employment for Singaporeans". What I am suggesting is that the Government does a thorough cost reduction review exercise. We must re-calibrate our policies to minimise upfront costs for companies and Singaporeans and let them earn better incomes. If done correctly, the Government may offset lower revenues by spending less on special transfers for social safety nets. We need to do more in the beginning and not at the end of the process by giving transfers.

In conclusion, everyone has a role to play to build an inclusive society and the Government, too, has a big role to play. Budget 2012 shows that the Government continues to recognise that, as we continue to grow rapidly, more Singaporeans are finding difficulty in keeping up. The Government therefore has to spend more to strengthen the Safety Nets to help reduce the stresses that Singaporeans face.

I would like to conclude that the strategy to restructure is not a bad one and that is one that would benefit Singapore and Singaporeans in the long run. However, the time horizon that the Government has provided for this restructuring to occur needs to be reviewed. We need to have a slower start but can accelerate later. For now, we should focus on short-term cost issues and allow companies to survive first. When we talk about restructuring the economy, we will also have to restructure the way the Government contributes to cost. If we are not careful at the pace of restructuring of the economy, we may end up hurting the future potential of our economy as we reverse many of the good things that we have been doing, as recommended by the Economic Review Committee in 2002. My fear is that once again the Government may be inducing a significant squeeze out of SMEs who are the biggest employers in Singapore today. And if we are not careful, the day that MNCs start to move out in large numbers, we will see a vacuum and a hollowing out of our economy without a strong base of home grown companies to take over. For the long-term view of Singapore, this is also not good and will undermine our restructuring efforts. If we want to restructure, to have a maximum effect, we need to work with our SMEs together on this journey. Sir, on the whole, I support the Budget.

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1.29 pm

Ms Sylvia Lim (Aljunied): Mr Speaker, Sir, we must ensure growth for all, not the favoured few. We do not need blind economic growth, we need compassionate growth. For a long time, the People's Action Party Government drove growth without paying sufficient attention to the adverse effects of increasing income inequality, especially affecting our poor, elderly and disabled. In this Budget, the Finance Minister course corrected to ensure that our poor, elderly and disabled are not stuck in isolated pockets of poverty in our island of prosperity. The Workers' Party believes we can do more to ensure greater cohesiveness as a nation.

First, empowering our poor. For the poor, the Budget takes a right step in emphasising the importance of social mobility. Our income inequality has grown rapidly. The rich have more resources to get ahead, which endangers social mobility. If not addressed, there will be "two Singapores": one for the mobile and rich, and the other for the immobile and poor.

Let us all agree to never allow the formation of a permanent underclass. I am sure all in this House are affected when hardworking Singaporeans in rental housing share how they are struggling to pay bills, their spouses are in prison, and believing that their child attaining a polytechnic diploma or university degree is a pipe dream. Sadly, I have met many of these mothers.

To raise wages for our poor, all of us have to play a role. The Finance Minister is right by imploring us to bring back respect for our waiters, cooks, chambermaids, crane operators, construction tradesmen and factory operators. These are hardworking Singaporeans forming the bedrock of our economy, allowing many others to work in higher income jobs.

The incentive for business owners is to lower cost, and hiring low-cost foreign workers is the path of least resistance. However, compassionate growth means we have to bite the bullet to improve productivity by being wise about the number of foreign workers invited into Singapore.

Continuing Education and Training (CET) has to improve the productivity of our workers to command higher wages. However, are there more success stories such as the private security industry? Even for that industry, will it remain a low wage sector despite some improvement in wages?

The Workforce Development Agency should share more details with the public about the impact from its substantial training investment, especially how these have benefited our lower skilled and low-income workers.

Next, securing our senior citizens. Our elderly built the Singapore we have the privilege to enjoy. Many had raised, cared and sacrificed for us. Let us honour them with a dignified life. The Special Employment Credit and raising CPF rates are encouraging steps for older workers. However, affordable healthcare is at the top of the minds for our seniors, especially those in the lower to middle income groups. This Budget acknowledges that affordable long-term care is the Government's responsibility, but we must do more.

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Earlier, the Member, Mr Inderjit Singh, shared data of how our total expenditure on healthcare as a percentage of GDP was far lower than international standards. More importantly, we note that the Government or public expenditure on healthcare is also far lower than international standards. Our Government expenditure on healthcare is about 1.6% of GDP, nearly four times lower than the 6.1% global average, based on World Health Organization's data 2009. In addition, the Singapore Government's contribution to the total healthcare expenditure has reportedly fallen from 51% in 1995 to 41% in 2009. This is much lower than over 60% in many other middle and high income countries.

Therefore, the Government is rightly catching up by doubling yearly healthcare expenditure from $4 billion to $8 billion over the next five years. However, this may work out to an end point of 2-plus per cent of GDP after five years, which is still much lower than the 6% global average.

I affirm the Government's focus in addressing the unaffordability of intermediate and long-term care. We know that Medisave, MediShield and Medifund provide only limited coverage for long-term care which involves recurring expenses over an extended period of time. Unfortunately, the Government had taken the back seat and pushed voluntary welfare organisations (VWOs) and commercial providers to take the lead in providing long-term care.

Many organisations had to raise charity dollars to subsidise bills of patients so that their families could afford care. Affected family members have been under financial strain due to substantial monthly nursing home bills. Some resorted to placing their elderly family members in institutions at Johor Bahru. This situation is untenable. We must do more. We must ensure that the long-term care subsidies factor in medical inflation. Towers Watson, a professional service firm, found that Singapore experienced 8.4% medical cost inflation in 2011, higher than national inflation and wage growth. The higher growth of medical inflation is a worldwide trend.

We must also explore how we can leverage on social risk-pooling to meet the high costs of long term-care. For a start, how can Eldershield insurance be expanded to help foot the cost of step-down care?

Our current Eldershield payout provides minimal coverage for long-term care needs. Viable insurance for long-term care will require higher premiums that may not be affordable for the less well-off. The Government should study how having better insurance coverage could help foot the cost of long-term care, and help Singaporeans pay or co-pay the higher premiums which will be needed.

Sir, we must also rebalance the need for family responsibility in our approach towards healthcare financing. I agree that family must be the first line of support, but many of us will not agree that all the children must deplete their Medisave accounts to pay for their elderly parents' medical bills before the Government intervenes. Given the longer life spans now, it has been noted that having a 60-year old withdraw his Medisave savings to pay the bill of an 85-year old parent is a reality in Singapore. Is this sustainable? This may, in fact, entrench intergenerational poverty, which would be more costly to society in the long run.

Next, on integrating our disabled. Our nation's cohesiveness is also reflected in how we care for the less fortunate, especially the disabled. We must help to integrate the three out of 100 Singaporeans who are affected by disabilities. Besides financial measures, can we do more to etch into the national consciousness that the disabled are one of us, with their hopes and dreams? Can we teach children from a young age that the disabled are part and parcel of our society? For example, how far do our school textbooks and children's TV programmes include disabled characters? Dare we consider incorporating disability as one of the admission factors for our institutions of higher learning, to recognise the more difficult circumstance disabled Singaporeans have to overcome?

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Sir, one of the great American Presidents, Franklin Roosevelt, said this, in the depth of the Great Depression:

"The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little."

Sir, we must have compassionate growth. We must be in the same ship. We must not be in separate boats where the rising tide of growth lifts some so high while others sink. The Workers' Party has long advocated a caring society. We will work with the Government to build a more just, more equal and more caring society, because our nation cannot prosper if only the prosperous prosper.

1.38 pm

Mr Ang Wei Neng (Jurong): Mr Speaker, Sir, thank you for allowing me to join in the debate. I welcome the measures announced by the Finance Minister to build an inclusive society and a stronger Singapore. I would like to make three recommendations for the Ministry's consideration: first, to intensify efforts to help more Singaporeans get a job; second, to quicken pace of our strategy to achieve a deep-skilled Singaporean workforce; and third, to develop a self-reliant Singapore population.

On intensifying efforts to help more Singaporeans get a job, I would like to see more segments of Singaporeans being able to find employment more quickly, specifically older workers, back-to-work women and ex-offenders. Today, the unemployment rate for Singaporeans is 3%. Over in the United States and Europe, they are struggling with unemployment rates of 8% to 10%. So, have we done well in comparison? On the one hand, the answer is yes. On the other hand, while I am glad that the Finance Minister has announced plans to enhance the existing Special Employment Credits (SEC) scheme, I believe we can do more. In an interview with Channel NewsAsia some weeks back, I called for more to be done through the SEC scheme for older workers, back-to-work women, ex-offenders and those with disabilities. What the Finance Minister has announced was far beyond my expectations. It was an aggressive move and companies should take advantage of the new enhanced scheme.

The scheme is now expanded to include more older workers – those who are 50 years and above – and the quantum raised to cover workers earning up to $4,000, and the duration extended till 2016. It is also extended to employers who hire Singaporeans who graduate from Special Education schools. I hope the Ministry can consider extending similar help to back-to-work women and ex-offenders.

Many women who stopped work to take care of their families would like to go back to work. The employment rate for women aged 25 years to 54 years old rose from 71.7% in 2010 to 73% last year. Apart from providing childcare support and flexi-work arrangements, we can certainly do more to help back-to-work women return to the workforce.

The second group of workers is ex-offenders. A recent report released by the Singapore Prison Service in February indicated that the number of inmates who secured jobs before release rose by 35%. This figure is encouraging. I find it heartening to see more employers creating opportunities to help ex-offenders re-integrate back into society. I would like to propose that the same SEC scheme be extended to employers who hire back-to-work women or ex-offenders. Companies can receive SEC for up to one year if the new hires are back-to-work women or ex-offenders. Of course, the scheme needs only to cover those who are 50 years old and below. With this revision, we can tap on our latent pool of back-to-work women and ex-offenders to cover any shortfall in foreign workers that we currently need.

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The second recommendation is to quicken the pace of our strategy to achieve a deep-skilled Singaporean workforce. During the last economic downturn, we had Skills Programme for Upgrading and Resilience (SPUR). Not only were companies able to cut costs and save jobs; more importantly, many workers were better trained. In this year's Budget, the Ministry has continued to strongly support training. SMEs who upgrade their workers for courses certified by WDA and academic CET programmes will receive 90% course fee subsidy. Absentee payroll cap will be increased from $4.50 to $7.50 per hour. But, more significantly, self-employed individuals will also get to enjoy similar training benefits.

I would like to draw Members' attention to an article dated 3 February 2012 in MyP aper . Let me read. The title says: "Not enough Singaporeans to fill specialised jobs". The article noted that foreigners are favoured over Singaporeans for some jobs, because our local workforce lacks the skill sets and expertise needed in areas such as environmental engineering, energy solutions, shipping and logistics. What does this imply? Does it mean that the WDA programmes are ineffective? Is it because we are not spending enough to train Singaporeans? Or is it because our Institutes of Higher Learning, such as ITE, polytechnics and universities, are not able to train Singaporeans in these areas?

Mr Speaker, Sir, the answer is obviously no. For example, I am heartened to hear that MOE will start the Singapore Industry Scholarship to develop future Singaporean leaders with deep knowledge in various sectors such as engineering, energy and tourism. While I am happy that many undergraduates will stand to benefit from this scheme, there are many more adults looking for a job or thinking of making a career switch, who will need similar assistance to acquire such deep skills. In addition, from what I observed on the ground, there are many companies which still regard manpower and training needs as an "afterthought". What do I mean by that? Let me share an analogy in Chinese to illustrate my point: yi nian zhi ji mo ruo shu gu, shi nian zhi ji mo ruo shu mu, bai nian zhi ji mo ruo shu. In English, it means this: it might take one year to grow rice; it might take 10 years to plant trees; but it will take a lifetime to invest in education and training of our people.

Mr Speaker, Sir, the 2012 Budget is a plan for the future, to help Singapore be stronger and more competitive. Suppose a company decides to invest here − this is a planned decision for the future; land has to be identified; infrastructure built; material and machinery costs calculated; and manpower needs to be considered. Such planning is not done in the midst of construction. Everything is thought through even before a decision is made to invest here. Manpower and training needs should not be an "afterthought". If we have known ahead that a company is investing in Singapore and that time is needed to conduct specialised skills training, companies should work with economic agencies, MOM, WDA, MOE, ITEs/Polytechnics, unions, etc, at a very early stage. MOE's announcement to groom Singaporeans from young is one step in the right direction. But we need to go beyond the academic route. We also need to be aggressive in our Continuing Education and Training (CET) route. We need to understand what the manpower needs and skill sets required, develop the course curriculum and train Singaporeans, and give our locals who are looking for new opportunities to be trained to enter this new trade. This way, we can gear up our local workforce to cater to the company's needs ahead of time.

Let me share an example of how planning ahead pays off for a company. Rolls-Royce's new facility at Aerospace Park was officially opened by the Prime Minister just a couple of months back. I visited the place more than a year ago. Even before their building was completed, the company had talks with e2i, NTUC, the union and WDA to identify skill sets and the type of workers needed for their new facility. Together, we placed over 80 Singaporeans on an apprenticeship scheme to work for Rolls-Royce. Many are ITE graduates. Today, they have access to join a top-notch company, enjoy good pay, have good career prospects and have acquired specialised skills.

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Through this, we are building a Singaporean core group who will have access to work in industries which offer good paying jobs. This behaviour is what all companies should adopt. More importantly, Government agencies overseeing different sectors should develop a comprehensive manpower strategy that will involve all stakeholders, one that allows us to build our own future-ready workforce comprising a core group of Singaporeans who are highly skilled.

My third recommendation is about developing a self-reliant Singapore population. I applaud the Government for the measures announced to enhance our existing social safety net. We have an even stronger support for the poor and low-income families now. There is also a special focus to prevent a permanent underclass from forming through the education route to enhance the social mobility of children who come from low-income families. Can we do more to encourage more of these families to break out and stay out of the social safety net?

I received feedback on the ground from social workers and others that the strength of our current social assistance and our compassion may have some unintended consequences. Let me try to illustrate. Some low-income families are concerned that if they earn higher income and as a result exceed the income criteria for social assistance, they stand therefore to lose out on a lot of subsidies. As such, many may choose not to earn higher income, preferring to stay under the radar. This may result in a disincentive to exit from the social support scheme. Many may even lose the drive to do better and earn more as they feel that their income increase may not be able to make up for what they lose out in subsidies.

So, on the one hand, while I welcome the new initiatives announced by the Government to top up our funds for social safety nets, our enhanced efforts to increase the mobility of children from low-income families, and our desire to hire more social workers to help them, I would like the Government to consider a complementary approach. May I propose that we reward those who have upgraded their skills, worked hard, improved their income and successfully moved out from the social safety net?

Perhaps we can consider two options to incentivise them to do better. One is to either hand out the same subsidies they were receiving previously for another year while considering giving them a lump-sum incentive. This is for those who were previously receiving social assistance but have decided to work hard and earn a higher income, therefore exceeding the income criteria for social assistance. This will send a very clear message to them that the Government wants to develop a self-reliant population whereby individuals will be encouraged to continue to work hard to improve their lives and the lives of their families.

Mr Speaker, Sir, it is important that we intensify our efforts to help more Singaporeans get a job so that more segments of those who want a job can do so quickly. It is also important that we quicken the pace of our strategy to achieve a deep-skilled Singaporean workforce so that we have a Singaporean core team to spearhead competitiveness in different sectors. Lastly, it is important that we encourage Singaporeans to stay motivated and continuously strive for improvement so that we can develop a self-reliant Singapore population. Sir, with that, I support the Budget.

1.49 pm

Ms Mary Liew (Nominated Member): Mr Speaker, Sir, thank you for the opportunity to participate in this debate. As a trade unionist, I am concerned about the issues pertaining to our workers, in particular, the low income and the elderly. These are the groups that I feel are most affected by the economic changes as well as the widening of the income gap. Sir, if we do not address these issues well, the gap between the haves and the have-nots will continue to widen, causing tremendous social frictions which would ultimately impact our overall economic performance and growth. I am glad that this year's Budget has addressed some of these issues to build an inclusive society and a stronger Singapore.

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At the NTUC National Delegates Conference in December last year, the Labour Movement shared its vision for 2015 of helping our workers to achieve better jobs, improve wages and enhance their well-being. We hope to accomplish this through productivity gains, so that wage increases and improvements in employment terms are sustainable, and that workers can enjoy the fruits of our economic progress.

Mr Speaker, Sir, we thank the Government for encouraging foreign and local investments which generated jobs for Singaporeans. Our unemployment rate is the envy of those countries experiencing high unemployment. We firmly believe that to have a job is the best welfare for our workers. We in the Labour Movement are also committed to do our part, together with our tripartite partners, to grow our economy, to keep our workers employed and to improve their wages.

The Ministry of Manpower and the Department of Statistics, in its report in October last year, stated that the nominal monthly income of those at the 20th percentile rose from $1,200 in 2001 to $1,400 in 2010. Adjusted for inflation, this worked out to a real growth rate of about 0.3% per annum. With the high cost of living in Singapore, one wonders: how can our low-wage workers survive? I was told by many that, as a result, they have to turn to the casinos. I have noted some progress since but, in my view, we have a lot to do to grow productivity and to sustain real wage increase of 30% over a 10-year period to improve the standard of living for Singaporeans. This is a very challenging task.

I am particularly concerned about the bottom 20% of our workers who have put in a hard day's work but still have to struggle to see to the basic needs of their families. The correlation between work and well-being does not seem to exist for this group of workers.

I am glad to note the recent improvement by the 14 Town Councils, who stepped up to help our cleaners to bring their wages up from $750 to $1,000. This is commendable. However, there are many other cleaners out there who are not employed by the town councils. They are earning about $600 a month but are similarly looking for a breakthrough in their wages. The same also applies to our security officers, who have to work long hours to earn a basic median monthly wage of $600. And after clocking many hours of overtime, they are then able to earn a gross monthly wage of $1,300. This is also the case for our bus drivers.

To enhance our public transport system by adding 800 buses on the road over the next five years is commendable. Much has been said about why over $1 billion will be given to profitable public transport companies. Personally, I have no principled objection to this move. After all, there are all kinds of grants, incentives and tax credits given to the commercial companies all the time. I think it all depends on what the money is used for.

If $1 billion brings a better bus service to commuters, better pay for workers to join the industry, I think it is money well spent. If everything goes to shareholders and they become $1 billion richer, I think not only me but all Singaporeans will have a problem with this. So the real question to me is: how will the $1 billion be spent?

I think a large chunk will go probably towards purchasing the new buses which, I presume, if left on their own, the bus companies will not invest in because it is a money-losing investment. However, the additional bus fleet serves also to aggravate the shortage of bus drivers unless something is done to expand the pool.

Let me relate the bus drivers' plight to illustrate this point. The life of the bus drivers can start as early as 4.00 in the morning. They will have to arrive at the bus depot by 5.00 am. They then check the bus thoroughly to ensure it is in tip-top condition and start the bus service at 5.30 am. They have their 20 to 35 minutes' break for meals at around 9.30 am. But if the bus arrives late – on the ground they call it " lambat " – they may only have 10 minutes for their meal and toilet break. And they will continue to drive with two or three short breaks of seven to eight minutes in the interchange. They usually finish their work at around 3.00 pm with a couple of hours of overtime. Working overtime daily is a norm for bus drivers to supplement their monthly basic wage ranging from $1,375 to $1,700. This helps them to make ends meet and it is also compounded by the shortage of bus drivers. Encountering difficult commuters is also common. A slip of the tongue, momentary loss of cool, means getting a complaint letter and, at the end of the day, bonus or increment can get cut. Exceed the slow speed at the junction of the interchange and, again, you can get fined.

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It is no wonder that Singaporeans find this a tough job. Unless we address the well-being of bus drivers, the demands on the public transport workforce cannot keep up with the expectations of commuters and the improvement of hardware.

Mr Speaker, Sir, our enlightened members in the National Transport Workers' Union (NTWU) look to the Government to help their companies to explore ways to increase productivity and to help to keep cost low so as to channel the savings to workers in the form of better wages and benefits. The bus drivers on the ground have fed back previously to the Government to look into other ways of helping the PTOs to reduce their costs of operation for public transport which, I understand, include ERP cost of some $30 million per year and high rental cost of depots, and they hope that these savings can be shared with the drivers and contribute to improving their wages.

The commendable act of the Government to partner the Public Transport Operators (PTOs) in providing funding for the 550 buses is welcomed by the union; however, we would like to ask the Minister to ensure that part of these savings by the PTOs will be ploughed back to our workers.

Besides the cleaners, security officers and bus drivers, there are many other sectors of workers that are experiencing different sets of challenges. We recognise that the Labour Movement cannot do it alone by ourselves, and we call upon our tripartite partners to take a bigger role in raising productivity and, in return, through productivity gains, our workers will expect a fair share.

The Prime Minister said at our NTUC National Delegates Conference: "Tripartism is our national treasure". We have settled our many problems through tripartism and we are committed to take tripartism one step further towards the Labour Movement 2015 – Tripartism for All.

The question I have, Mr Speaker, Sir, is: does every Government Ministry, department and statutory board appreciate this treasure? From my observation, the spirit of tripartism varies across the agencies.

Take the National Environment Agency (NEA), for example. I understand they are proactively looking into a working group comprising Tripartite partners to work together towards improving the work and wages of our low-wage cleaners. Tripartism is alive and well at NEA. Or take the Workforce Development Agency. They have formed a close partnership with NTUC in developing and delivering training programmes for workers.

But there were other agencies where collaboration is non-existent, or where there is only lip service. This will not do. Every Government agency must understand, whatever industry or activity it is promoting or regulating, that it cannot fulfil its mission unless it pays attention to the people working in the industry or activity. And if workers are a key thrust of your strategy to achieve your mission, the labour movement will need to be your partner. I would like to call upon the various Government agencies to live up to the spirit of Tripartism and to build upon this national treasure. This could be in the form of the Ministry of Home Affairs championing the cause of low-wage security guards; Ministry of National Development for the low-wage construction and landscape workers; and even the Ministry of Trade and Industry for the low-wage retail workers.

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Mr Speaker, Sir, on the elderly, my concern is the strong prejudice against employing senior citizens, even with the enactment of the re-employment law in January this year. As it is, many in their 50s are increasingly finding it difficult to be employed. I am heartened that the Minister for Finance has put in place a Special Employment Credit which will soon take place. The Government would need to continue to proactively encourage and engage employers to help overcome this bias and, if necessary, to look into other incentives to encourage their employment. Having a job would help the dignity of the elderly and also to lighten the cost of their welfare and healthcare systems.

On CPF, I am glad the Government has responded positively to the call by NTUC and the then Vice President of NTUC, Mr Cyrille Tan, to review the CPF contribution rate for older workers. Sir, on the CPF issues, I am concerned about workers not having sufficient savings in their CPF accounts to retire with financial independence. I would like to make reference to the 1984 Report of the Committee on the Problems of the Aged by the late Minister for Health, Mr Howe Yoon Chong. The Report mentioned the Government's ultimate goal of raising the rate of CPF contribution to a maximum of 50% of an employee's salary and the CPF withdrawal age to be further raised to 65 years in later years. I believe the proposal was mooted with the objective of enabling workers to accumulate sufficient funds in their CPF accounts for retirement. I also noted that back then, the price of an HDB flat was much lower as of today.

During the Singapore Perspectives 2012 Forum organised by the Institute of Policy Studies on 16 January, a professor shared on retirement adequacy measured by income replacement ratio, which is the proportion of the working income that one has at retirement. He shared that the current CPF contribution of 36% is not sufficient for retirement, and he suggested maybe 42% will be more sustainable, and this is on assumption if there is no withdrawal of CPF for housing. Sir, this again seems to suggest the inadequacy of the CPF savings to support the retirement needs of our workers. CPF contribution had been cut three times from 25% to 10% in 1986, 20% to 10% in 1999 and 16% to 13% in 2003. However, the restoration from 10% to 20% and 13% to 16% both took eight years to restore. This excludes the further CPF cuts for workers age 50 years and above.

To illustrate my point of how much Singaporean workers have sacrificed in their CPF savings, I take the case of a 30-year-old worker who earned S$1,000 per month in 1985 and the employer contribution rate then was 25%. If this 25% contribution had not been cut, the worker would have accumulated an additional of more than S$30,000 in his account by 2011, that is, 26 years later. This is excluding interests and wage increments. If he or she earned S$3,000 per month in 1985, the sacrifice would be more than S$90,000.

I have illustrated this for various reasons. Mr Speaker, Sir, firstly, it is to acknowledge the sacrifice of our enlightened workers way back in 1986 and many of them are the elderly of today. Because of their sacrifice, because of their understanding, because they were discerning, they did not take to the street, they did not go on strike because they were enlightened. We progress as a nation to where we are today. Sir, the $30,000 would have meant a lot to our low-wage workers. Secondly, I would like the Government to review and look into a long-term plan to determine a reasonable CPF rate for our people, including the young ones, so that when their turns come for them to retire, they would have a nest egg to retire gracefully with dignity. Lastly, I would like to appeal to our Government, please no more CPF cuts. I therefore urge the Government not to implement a one-size-fits-all policy should there be a need to cut CPF.

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In conclusion, I would like to commend the Deputy Prime Minister for delivering an inclusive, a caring as well as a pro-Singaporean Budget that goes a long way to help the weak, and truly, I believe, it is more blessed to give than to receive. On this note, I support the Budget.

2.07 pm

Mr Liang Eng Hwa (Holland-Bukit Timah): ( In Mandarin ): [Please refer to Pg 1400 for Vernacular Speeches.] Mr Speaker, the Government's Budget had always given the impression of being pro-business and pro-growth. The economic policies are also aimed at Singapore's long-term economic development. However, this year's Budget overturned this view.

For many SMEs, this year's Budget does not come across as being pro-business. Instead, the Government is stepping up the necessary reform in the labour market. But what is encouraging is that this year's Budget is more pro-people, more inclusive, especially in helping the elderly, the lower-income, and people with disabilities. This gives me comfort and I would say this is a compassionate Budget.

In this Budget, the Government is introducing a slew of well-thought, new measures for the elderly to enhance the safety net, focusing on jobs, housing and medical cost.

The assistance package for the elderly, as announced by the Finance Minister, reminds me of a saying by Mencius when he described his ideal world: "If you look after the old as if they are your own parents and look after the young as if they are your own children, then the whole world is in your hands."

It means that you should not only look after your own parents, but also take a further step to look after other people's parents; you not only take care of your own children, but also take care of other people's children. The country is like a big family, everyone should help each other, care for each other and respect each other. Nobody should be neglected just because he is vulnerable. We should look after our elderly so that they live well and live long. If we can do that, the whole society will be more loving and more inclusive. This will strengthen people's sense of belonging to our nation and society.

( In English ): Sir, it is not often that we have the Finance Minister that also doubles up as the Manpower Minister, so in my remaining speech I will seize this opportunity and focus mainly on manpower issues and, in particular, how we manage our over dependence on foreign workers.

Sir, Budget 2012 will probably be remembered as one where it is less business friendly; one where we bite the bullet, take the pain and press on with the restructuring of our economy. Even with a number of enhancements to the assistance schemes available for the SMEs and the many other helping hands to improve productivity, this year's Budget is still seen as harsh to many of the businesses. The SMEs will be directly impacted by the further tightening of foreign labour. Some enterprises will experience severe margins compression as a result and some may no longer be viable. Others may choose to relocate elsewhere or exit the business altogether.

The interesting thing that came out when I spoke to some of the business people is that many actually do buy in and are in unison with the Government on the need to reduce our over dependence on foreign workers and to uplift productivity. But that is about all in terms of a meeting of minds. Beyond that, the Government and businesses are miles apart as to how fast and how much we could tighten up foreign labour. It is between a cold turkey treatment, or gradualist approach, or somewhere in between.

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The end state we hope to achieve in this restructuring is to keep the foreign workforce at a socially acceptable level. The ESC referred to this level as about one-third of the total workforce. So, we are still talking about a one-third leverage in manpower. With tighter foreign labour inflows, the Government hopes that companies would either look to improve productivity or hire more Singaporeans or both. The social intent here is that as companies pay up to attract Singaporeans to the job, it would help grow our median wages. We all want a socially sustainable and inclusive way to grow our economy where at the end of the day, more citizens will benefit from the growth.

It is going to be a rough ride to get there and there are significant risks that we have to contend with. So, what are the risks and what could go wrong? First, there is the obvious risk of an unsustainable rise in business costs. We are hearing this loud and clear from the businesses. Raising the foreign worker levy will directly increase labour costs. Tightening the DRC will also compel companies to pay up to hire local workers and hence would also add to the manpower costs. In an almost full employment situation that we are now in, local hiring may well be a zero sum game. The most probable occurrence would be the unhealthy practice of staff poaching from each other which would just push wages up sharply to an unsustainable level. The cumulative increase in levy announced so far is expected to increase wage cost by 20% to 25%, according to some studies. Escalating business costs would impact companies' bottom line if productivity improvements are not able to make up for the cost increases. The concern here is whether this would lead to a repeat of a 1985-style recession.

Back in 1980s, as part of "wage correction", the NWC recommended three consecutive rounds of aggressive wage hikes. This resulted in a severe loss of international competitiveness. At that time, the wage reform actually benefited Singaporeans more directly because it was a straight wage increase for the workers. In our current situation, the restructuring is done by way of tightening foreign labour dependency ratio and higher levy. One of the causes cited in the 1986 Economic Committee Report to review the economy then stated that the loss of competitiveness due to high costs of doing business in Singapore as one of the internal factors for the recession. So we have to be mindful during this adjustment phase not to allow non-wage operating costs to rise beyond control as costs are usually more sticky on the downside.

Secondly, the inflation risks, as well expressed by many economists. It is unavoidable that some of the businesses will pass on the increased costs to consumers, especially those in the domestic services sector. Given the significant cost impact from increased wages and levy, prices will head north. Whether it is the cleaning contractor, delivery, building maintenance, restaurant, and so on, these will likely cost more. In the midst of all these adjustments, we may be facing a sharp oil shock arising from the Middle East geo-political tension. So, we cannot take our eyes off inflation.

Thirdly, the potential risk of hollowing out within our economy. The expected rising costs and higher inflation coupled with tight labour supply will no doubt reduce our attractiveness as a business and investment destination. We can expect more relocations and reduction in direct investments. Even without these foreign labour tightening measures, there is always the fear of industry hollowing out due to our small domestic market and the lack of a dynamic hinterland. Of course, economies remain viable on the premise of comparative advantages. Companies that are more labour-intensive will naturally relocate to locations with abundance of cheap labour.

It does fit into our economic strategy that we are pursuing, where we do not want all the labour-intensive part of the business to be done here, while keeping the nerve-centre activities in Singapore. This is actually part of our game plan to internationalise our economy and what the role of IE Singapore is playing. The setting up of a cross-border project finance institution and the development of Iskandar region at Johor would also complement our strategy. However, if the cost pressures and tight labour supply hit every aspect of the economy with no corresponding improvements in productivity or local labour participation, we could see an exodus or downsizing of companies, and this may include losing some of our strategic capabilities which we hope to retain and grow.

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Fourthly, the risk of long-term unemployment. Restructuring the economy often results in major permanent changes in the employment market. Some jobs may become obsolete while new skills sets would be in demand. Countries with across-the-board high wages tend to experience higher structural unemployment. We only need to look at some of the developed economies, whether it is in Australia, UK or Europe. The new economic landscape may mean requiring even more social spending as there will be greater need for a stronger social safety net to deal with higher unemployment.

Sir, I am highlighting these risks not because I am against restructuring. We all know that not moving forward or to stay put is not an option. As a small island state and a very open economy, our economic development is akin to riding a bicycle. If we stay still, we will topple. And the only way to remain standing is to keep pedalling on and to keep riding ahead. Leveraging on foreign workers to grow has its limits; not just physical and social constraints but there are also sound economic arguments why we should reduce our dependence on foreign workers. We want to continually elevate ourselves to be amongst the most productive and the most technological advanced country in the world. Having an abundance of foreign workers would not get us there. In any case, foreign labour will not always stay cheap. We must be prepared for the eventuality where foreign workers will cost more due to economic progress in those countries where the workers come from. And, increasingly, we are also seeing more jurisdictions adopting minimum wages. China, in particular, is currently facing a significant upward wage correction as well and we are only just seeing the beginning.

So, how do we manage and mitigate these risks that I have just highlighted?

Well, if labour costs have to move up, we just have to hold all other costs down, at least for now. One of the most important costs we need to restrain is, of course, the cost of land which Mr Inderjit Singh has also mentioned. According to URA data for the year 2011, as a whole, prices of multiple-user factory space increased sharply by 27.1% while rentals increased by 16.2%. And this is after steep increases of 23.7% in prices and 11.7% in rentals in 2010.

If land costs continue to rise at such a rate, our international competitiveness would be eroded even without this round of labour cost increase. Even at the heartlands industrial workshops, where many of the small businesses operate, they are experiencing higher lease renewal costs and sharp rental increases. Just like hawker centres, these industrial workshops offer to businesses no-frills, practical and budgeted workspace to operate. And these businesses, in turn, offer low-cost services and small job repairs to residents living in the neighbourhoods.

So, here, JTC and the other agencies must continue to play the role of keeping our industrial land affordable to sustain our competitiveness. JTC should not be too eager to mark its industrial land bank to market as the cost ramifications are very serious to the industries and the businesses. The Government's hand in managing this in providing public goods is still very much still needed as we want an environment of stable land cost for the industries. We cannot exert an upward cost correction for both labour and land at the same time. This would be value destruction and we would soon lose many of our key economic capabilities to the competing economies in the region.

The second cost-related concern that we need to manage is the strength of our Singapore dollar. The strong Singapore dollar has always been one of our policy tools to manage imported inflation. While the local importer has been the major beneficiary of this policy, it is the exporter that is bearing the brunt of the strong currency. With higher wages to come, our local labour cost will look even more expensive in foreign currency terms when the Singapore dollar strengthens. A continually strengthening Singapore dollar will depress the top line revenue of our exporters. Singapore is a price taker and exporters cannot set a higher price at the global marketplace.

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For productivity improvements to offset both the escalating wages and stronger Singapore dollar at the same time would be asking too much from the exporters. The export sector is a crucial engine of growth. It brings about the much needed foreign exchange. We should not lose these capabilities. Sir, I am not saying that we depreciate our Singapore dollar to improve our export competitiveness. What will be helpful to exporters in this environment of rising costs is to maintain a stable exchange rate policy so that companies do not have to pay a further premium for the exchange rate volatilities.

Mr Speaker, Sir, in the final analysis, the Ministry of Manpower must still retain the flexibility in some sectors where it is clearly very difficult or impossible to find Singapore workers to replace. This could either be due to the lack of such skills sets or where wage increase would not lead to higher labour participation. A case in point is the construction industry and the cleaning industry, where it will be impossible to fill up these job openings with Singaporeans.

Sir, we should also be mindful that labour market adjustment should not be done at the expense of the quality of work or the quality of service. Our quality of life should not be impacted as a result.

On the question of timeframe, I want to salute Deputy Prime Minister Tharman for setting a very aggressive timeframe − a 10-year timeline and target. To grow our real median wages by 30% in 10 years is a very ambitious target and it is not an easy task to do. So, I respect him for taking on this very challenging cause, and I hope Singaporeans will appreciate what he is trying to do. We all know the risks. In the next 10 years, we can expect many known and unknown shocks that may come our way. We should not pursue this stretch target at all costs. While we want to ride our bicycle forward, we should still watch out for the potholes and do some refinements along the way. And one indicator that we should watch very closely is the unemployment rate.

Sir, Budget 2012 also marks a distinct shift in our social policy. We meant what we said about being inclusive. It would, of course, come with added financial responsibility. The cost of social spending can only increase in the years to come with our ageing population. We need to grow our economy to generate the financial resources to fund even more social programmes in the future. And we still need to continue growing our reserves so that the NIR contribution can grow beyond the $7.91 billion the Government received last year to fund the Budget.

Our reserves remain our most important strategic resource and our long-term financial security. The recent second bailout for Greece cost the EU and IMF 130 billion euro or S$218 billion. This is in addition to the earlier bailouts of Euro 110 billion in 2010. And this may not be the last time that Greece will stretch their hand out for money and there is still this risk of default. So it gives us a sense of the magnitude that if we mismanage our finances and run out of savings, that will be our fate. And, here, we cannot look to EU for a bailout. We can only count on our own savings to bail ourselves out, which is why I want to caution that when we measure the outcomes or the adequacy of our healthcare, we should not look at the amount of money we spend. In fact, that is just too simplistic. In US, for example, social security, Medicare, MediAid − just three items − account for about half of the US government's non-interest spending. So, to measure our healthcare adequacy and outcomes just by its spending will be too simplistic.

Finally, Sir, in the Finance Minister's two-hour long Budget Statement, one of the lines in his speech stands out and warms my heart. He said, "Let's help our seniors live long and live well." These words reminded us that, at the end of the day, governing is all about people's lives and living well. Clearly, Budget 2012 will strengthen our social compact and will make Singapore even stronger. Sir, I support the Budget.

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2.25 pm

Mr Chen Show Mao (Aljunied): Mr Speaker, Sir, the mission of this Budget is to, I quote, "build an inclusive society and a stronger Singapore". The Budget proposes to build an inclusive society by social policies designed to help the elderly, Singaporeans with disabilities and lower-income families. The Budget proposes to build a stronger Singapore by economic policies designed to sustain growth through higher productivity and reduce our dependence on foreign workers. The Budget proposes to build a stronger Singapore by economic policies designed to sustain growth through higher productivity and reduce our dependence on foreign workers. We are glad that the Government has heeded the call of many Singaporeans for more inclusive growth. That is our long held belief. And as the hon Member Ms Sylvia Lim said, we believe we can do more.

The elderly, the disabled and the poor in need of social security should not be seen primarily as social problems or "challenges", as the Budget puts it. These challenges are, in fact, opportunities to invest in our human capital for great social returns. We need to change our mindset. Investing in our elderly, the disabled, the poor and other needy Singaporeans will reward society with the economic, social and cultural contributions they will be able to make with assistance. It will also enable us to be more inclusive, which is the basis for community and social cohesion.

We should not see social outlays only as spending to be minimised over the short term, but also as investments to be optimised for our long-term benefit. We should seek out such investment opportunities to realise social returns in different areas of social policy, not just social security, but public housing, healthcare, education, and infrastructure and the environment. We should actively, systematically and strategically seek them out, much as we do in the case of opportunities for economic returns, for example, with agencies such as EDB, A*STAR and SPRING. We should seek to unlock not only economic value with our investments but also social and cultural value that would make for an inclusive society and a stronger Singapore.

The elderly, for example, are a repository of social and cultural capital to be treasured and tapped on to enrich each passing generation. With some investments that keep them close to their homes, we can leverage the elders' longstanding ties in mature neighbourhoods to teach our children traditional wisdoms and values, and stories and lessons about our communities. Similarly, Singaporeans with disabilities and other needy Singaporeans, when the locked-in value of their human capital is released with more investment, they reward society with their enabled contributions as well as such intangibles as compassion and empathy. This argues for investing in social safety nets that keep up with the costs of living. We want to see all Singaporeans run a good race in a globalised and competitive world. When some of us trip and fall behind, we should help them get back up and stay in the game for a stronger Singapore.

For us to restructure and upgrade to an economy that is more productive in order to raise real wages, we need to depend less on foreign workers. The Budget recommends that we reduce the Dependency Ratio Ceilings for businesses in manufacturing and services and reduce man-year entitlement quota for those in construction. How effective will the proposed measures be in reducing our dependence on foreign workers? The population of foreign workers grew rapidly at 7.5% each year over the last two years. Growth for our resident workforce is under half of that. The proportion of foreign workers had already breached the Government's one-third target set in 2010, and was over 35% last year. Given the size of the task, a multi-year plan is needed to manage effectively our foreign worker dependency and allow our businesses time to adjust. Let us do more for them.

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Let us refine the Manpower Ministry's current segmentation of industries for dependency ratio ceilings to ensure more targeted foreign manpower policies. As other Members have pointed out today, the Ministry of Manpower's current framework of segmenting the economy into broad sectors – manufacturing, services and construction with exceptions for marine and process – is a blunt tool. For example, in the services sector, the dependency ratio ceiling is the same for food and beverage (F&B), social services and also for finance and other industries. Could we look into the possibility of having different industry clusters for setting dependency ratio ceilings? One cluster could comprise industries that have high productivity and generate good jobs for Singaporeans, for example, finance, aerospace, biomedical and professional services. For these industries, we may have more stringent foreign manpower policies so that foreign workers complement and not substitute Singaporeans. We could even include lower end employment passes in the calculation of the dependency ratios as these are jobs that young Singaporean graduates would find attractive.

Another cluster could comprise industries that contribute to meeting Singapore's social needs and would have a significant impact if higher labour costs were passed on to the consumers. They could include social services, public healthcare and construction for public infrastructure. For these industries, we may need less stringent foreign manpower policies to keep costs low. Other clusters could be based on the industries different prospects for productivity gains.

The Deputy Prime Minister previously argued that quotas for different sectors are not workable and would constrain businesses' flexibility to get the necessary manpower to expand. But remember – while we do not have different quotas targeted at different service sectors, for example, that does not mean we do not have quotas. We still have a dependency ratio ceiling that applies to all industries in the services sector. We believe we can do more to help our businesses in the different sectors adapt to permanent but different realities of a tight labour market in their respective industries. By working with them on the different targets and roadmaps of reducing the dependency ratio ceilings, we are not asking, in the Deputy Prime Minister's words, for "a group of bureaucrats to decide which industry is more deserving", but we are asking for the Government to work more closely with the different stakeholders in the different industries, get their input, rally their support and render them assistance. The same way the Government is working, for example, with stakeholders to set productivity targets and roadmaps for 16 different industry sectors.

Last October, at the Opening of this Parliament, I cited the United Nations' inaugural Human Development Report in 1990, which declared "people are the real wealth of a nation. As it happened, 1990 saw the tail end of our first national productivity campaign. The mascot of the campaign was a bee by the name of "Teamy", and his song is deeply, deeply imprinted in our cultural memory: "Good, Better, Best. Never let it rest". However, in more recent years, reliance on cheap foreign labour has coincided with the decline in our productivity growth. We are in the midst of the third productivity campaign following Teamy and Productivity Action 21. Today, we have "Way to Go, Singapore!" with a sectoral approach to productivity growth in 16 sectors with their own targets and roadmaps. Our national productivity campaigns must go deeper to achieve sustainable productivity growth. Ultimately, we need to invest in the human capital of our workers for growth. We should start now and engage in long-term sustainable investment in our people. We need to invest more in education in schools, in training our workers for the job so that they can do the job better and do a better job at it, and in empowering our workers on the job, so that they can make the job better.

We can also invest more in other aspects of a Singaporean's life and that of her family, social security, public housing, healthcare, education and infrastructure and the environment, so that she becomes a more productive worker. In conclusion, Sir, let us go back to fundamentals. We need to put Singaporean workers back in the game before they can raise their game. To invest in Singaporeans is to invest in the future of Singapore. It has been said so many times and for so long that the only resource Singapore has is ourselves, that our most important capital is our human capital. Inclusive growth must be built on the growth of our human capital.

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Mr Speaker: Mr Vikram Nair, do you have a clarification? Keep it short, please.

Mr Vikram Nair (Sembawang): Sir, I thank Mr Chen for his speech. As a matter of principle, there is so much I agree with what he has said. I think we need to invest in the vulnerable groups, the poor, the disabled. Listening to both his speech and Ms Sylvia Lim's – there have been many proposals for additional spending. The one question I have is: what does Workers' Party intend to do on the revenue side? Is it planning to raise taxes or eat into reserves to pay for all these additional programmes? Because I think the objectives are noble. I am just wondering how he balances it out.

Mr Chen Show Mao: The clarification is for how we would propose to increase revenues in order to fund these investments. By the nature of investments, over the term of the investments, we would hope to see returns – both economic returns and social returns – generated by the outlay in this period.

Mr Vikram Nair: I am sure we will go into those details in the COS when the detailed policies come up, because there has not been much detail here. But even in the initial outlay, is he suggesting that we run a deficit to do that? If so, for how long before we get dividends?

Mr Chen Show Mao: No, I am not proposing that we run a deficit to fund additional social spending, but we can look at the numbers both on the revenue side and how much we hope to make in terms of investments to come to a solution.

Mr Speaker: Asst Prof Eugene Tan.

2.41 pm

Asst Prof Tan Kheng Boon Eugene (Nominated Member): Mr Speaker, Sir, thank you very much for this opportunity to speak on the Budget Debate. This coming financial year's Budget addresses some of Singaporeans' key concerns as Singapore undergoes transformational changes by making a significant calibrated shift in the Budget's focus. The Budget represents a re-calibration, a necessary right-sizing of the social compact.

This Budget signals an assertive return to the fundamental of shared and inclusive economic growth as the cornerstone for a revitalised social compact. It underlines the move away from "equal sharing" to one of "equitable distribution" as the fundamental basis of sharing our nation's wealth. This shift is at least a decade in the making. To be sure, equity has been a growing "accent" in previous Budgets since 2002.

But, going forward, equity must be the unequivocal "language" of future Budgets. Equitable distribution and sharing must form the foundational stone of our Budget. Those more in need will receive more while those who pay the most taxes do not get as much. It is timely that the focus of the Budget is squarely on older Singaporeans, Singaporeans with disabilities, and lower income Singaporeans. This commitment towards preventing a permanent underclass from forming is necessary. The reality is that economic globalisation and our economic policies have not resulted in every Singaporean being able to benefit from them. In fact, there is a considerable segment of Singaporeans who have found the economic transformation and restructuring disconcerting as they have not been able to take advantage of it. This group feels displaced by the rapid economic changes and feels that the nation's prosperity seems to have passed them by.

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Sir, the abiding imperative to renew Singaporeans' confidence in the commitment to shared economic growth is crucial if the ongoing plans to restructure the economy are to have the buy-in from Singaporeans. The social and economic dimensions of the Budget complement each other. Our society will be all the poorer if we do not pay equal attention to both. Economic growth is necessary to sustain the evolving social compact as our nation grapples with competing, and perhaps even conflicting, needs and interests. Sir, let me now list what I thought are some of the noteworthy features of Budget 2012.

First, there is a greater willingness to look beyond the 12-month fiscal year through multi-year spending commitments. This funding model benefits, for example, the Special Employment Credit, which is aimed at encouraging employers to plan ahead and hire older workers. I hope that future Budgets will have more spending commitments beyond 12-month fiscal year, especially in areas where multi-year funding is vital to ensure continuity and sustainability of those programmes. We should not let the financial year's duration limit our commitment to plan beyond the next 12 months. For many of the issues we are grappling with today, such as income inequality, dysfunctional families, expanding the public transport network, we should not be strait-jacketed by a 12-month timeframe.

Second, I applaud the relatively comprehensive package of helping Singaporeans with special needs through strengthening early intervention and education, to supporting their being in gainful employment, and to the provision of better adult care. This support given to Singaporeans with disabilities is, I believe, unprecedented. They have often been at the periphery of the Budget and our society but there is now a concerted move to help them.

The third noteworthy feature is that the support for low-income Singaporeans has progressed to embrace non-income support. The plan for more social workers and other professionals to help lower income families underlines the need for a holistic approach to helping them break out of the poverty cycle and become resilient. I hope we can make a serious effort to make non-income support a central feature of our ecosystem of care and caring. This House would be more than familiar with the gross limitations of what income transfers can do. In 2011, Government transfers constituted a massive 43.8% of the annual household income from work per household member for HDB 1- and 2-room resident households. This is an increase over the figure of 43.3% in 2010 and 41.4% in 2009. These transfers help in the short term but to help families become self-reliant and confident about the future, the need for psycho-social, holistic help, and principled-based case intervention are necessary if Government transfers are not to become a crutch for the disadvantaged among us.

Fourth, with the introduction of the GST Voucher, the Government has acknowledged, albeit indirectly and somewhat reluctantly, that the GST is a regressive tax since lower income households pay a larger share of their income to the GST than wealthier households do. Given that the GST Voucher will operate as a permanent system of offsets, does it suggest that an increase in the GST is likely to be sooner rather than later?

Much as there is a tendency to see less well-off Singaporeans as the primary beneficiaries, it bears noting that we are all better-off as a society when it engenders resilience, hope, and confidence in the future, regardless of one's socio-economic status. Furthermore, how we, as a society, care for the disadvantaged, give voice to the voiceless, and help the downtrodden among us reflects on our heart-ware, and the quality of our nation-building.

Sir, it would be a pipe-dream for any Budget to remove the inequalities in our society. Nonetheless, the Budget must contribute towards a less unequal society. I submit that the Budget must represent the essence of our social compact. Our social compact must retain its inclusiveness, legitimacy and effectiveness. The growing income gap raises the real concern of the imminent development of "two Singapores". As the growing income gap is a reality that will persist into the foreseeable future, what will prevent this state of "two Singapores" is to ensure true social mobility and to provide adequate social safety nets that encourage risk-taking while not sapping the work ethic so carefully nurtured in the management of Singapore's success. Indeed, social mobility, and its promise of economic opportunity and success, has served as a powerful engine of economic growth and a source of social cohesion.

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Sir, the sustenance of our social compact requires a multi-stakeholder approach. Governments alone cannot maintain social compacts. A key challenge as we incur more social spending in the medium to long term is whether those who bear the tax burden would appreciate the significance and shoulder the responsibility of the better-off helping the less well-off. If so, we have a sustainable social compact that will not only be a deep resource of Singaporeans' bond with the State but it will also nourish the affective ties between fellow Singaporeans. The Budget is a social compact that must be a common enterprise for the common good. If not, then we will have "two Singapores" forming, and such a divided country will undermine the hopes and aspirations of all Singaporeans.

Sir, I hope this House will affirm the need to view the Budget as a tangible manifestation of our evolving social compact. To be sure, the Budget is about sharing our wealth, and Budget 2012 is a "social Budget" that puts the disadvantaged and elderly Singaporeans at the forefront. The Budget is a very powerful tool, an influential driver of social engineering to mould social attitudes and mindsets, and influence socio-economic behaviour. However, I do not think we have effectively harnessed that to good effect. Instead, in recent years, the Budget has all too often emphasised the "goodies" it contains which Singaporeans have now grown to expect as an entitlement. I note that the Finance Ministry's Budget website provides a calculator tool for households and businesses to estimate the total amount that they can receive from the Budget. However, the larger and more important messages intended by the various policies and measures are drowned out by the "noise" of calculating and comparing one's budgetary "gains" and "losses". This cultivation of "what's-in-it-for-me" mindset may unwittingly lull Singaporeans into sacrificing long-term benefits for short-term gains.

Sir, the Government has been criticised severely in the past for being tight-fisted. There are now concerns of whether the pendulum has swung to the other extreme. Even as the Budget shifts our focus towards expanded social safety nets to help the less well-off Singaporeans, there is a concern of whether we might be unwittingly planting the seeds of a welfare state. I doubt so. The fact that the concerns are raised suggests that we are mindful of the dependency syndrome. It is perhaps inevitable and necessary, given the differential impact that our economic policies have on different groups of Singaporeans, that Singapore has become more welfare-oriented in recent years. However, if being less tight-fisted on principled grounds to help Singapore remain inclusive and a land of opportunity, without undermining the spirit of self-reliance, then, why not? Besides, rising inequality results in declining equality of opportunities, and runs the risk of political backlash and social instability. Both could undermine the economic dynamism and social cohesion that form the bedrock of our success.

But I also detect, through my association with the voluntary welfare sector, the nascent signs of an easy reliance on the Government. What is more important now is to inculcate the desirable values, norms and attitudes even as we roll out more support. Our Budget and the assistance it offers to less privileged Singaporeans must not result in their having a crutch mentality. For those who are able-bodied, the combination of assistance and government transfers must reinforce the dignity of work. The message of re-skilling, skills upgrading, and lifelong learning must strike a chord with Singaporeans.

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In addition, I hope that as a society we will keep a lookout for children from disadvantaged homes. In this regard, education – especially pre-school education – becomes critical in ensuring children from such homes are not unnecessarily disadvantaged by the fates and fortunes of their parents. It goes towards helping children from such homes have equal access to the equal opportunities that the Singaporean system has prided itself of.

Sir, even as the Budget seeks to provide a leg-up for the bottom 20th percentile of Singaporeans, we should be mindful of those in the so-called sandwiched middle class who do not get as many benefits as the lower-income group. They too experience middle-class anxiety. My view is that in the past decade, the Government has focussed more on the threat to jobs that the bottom 20% customarily face as their jobs get off-shored, out-sourced or simply become unavailable. However, we should pay just as much attention to the threat to wages that the sandwiched middle-class Singaporean faces. This group of workers still have their jobs but their wages are stagnant relative to the rising costs of living and tax burdens.

Sir, my second major theme is the need for the business community to play a larger role in tackling some of the challenges in our society. Contrary to the talk among businesses, the economy did not, in my view, take a back seat in Budget 2012. For too long, the corporate sector has perhaps benefited from the fiscal largesse dispensed due to the Government's anxiety to grow the economy and our desire for material well-being. Against a backdrop of a growing income gap, I would urge the business community to see the Budget in a different light.

Sir, it appears that the business community equates a social Budget as a Budget that is not pro-business. In fact, given the economic transformation and ongoing restructuring, the Budget needs to secure the buy-in of Singaporeans. So, a social Budget is inherently pro-business. The Budget is our social compact and the business community is a key stakeholder. Singapore's Budgets cannot be seen as a zero-sum game where if more is devoted to social spending, that there is then less for the economy. Strong economic growth and a cohesive society are not and need not be mutually exclusive. Businesses can do more and should do more in areas like employability of older Singaporeans, tackling the various forms of workplace discrimination, and promoting work-life balance. The need for businesses to step up and play their role in the development of a resilient society is necessary. It is vital for them to do so if the tripartite framework that has served us well is to be sustained and enhanced in tandem with a changing world. In real terms, a cohesive society means that in times of economic uncertainty, the Government and businesses can muster the requisite political will, support, and flexibility in tackling the challenges of the day. This has been amply demonstrated in the past.

Sir, I gather that the Budget's measures to reduce the Dependency Ratio Ceilings (DRCs) have not gone down well with the small and medium enterprises. The global economic landscape is changing rapidly. For too long, we have become too dependent on perspiration through cheap labour inputs, rather than inspiration and innovation to achieve economic growth. We urgently need to put emphasis on productivity and innovation. And our SMEs must rise to the challenge to take Singapore's economy to new heights and to reduce our reliance on multinational corporations and Government-linked companies. The SMEs are an untapped engine of growth. They need to be nurtured but certainly not molly-coddled. Sir, I urge the business community to see the Budget from a societal perspective. Adding value to society's stakeholders will ultimately benefit shareholders and business owners.

Mr Speaker, Sir, Budget 2012 will not eliminate inequalities in our society. Instead, the Budget will have to tackle resolutely the widening income gap while ensuring that Singapore's economic dynamism is continuously enhanced. Yet, it is this economic dynamism that has caused the income gap and the middle-income squeeze. I suppose Singapore has no choice in this regard – we have to take the downsides, even as we benefit from globalisation. The Budget aspires towards a more balanced approach towards growth and equity even as fiscal rectitude remains a cardinal principle in our budgetary policy. Not only does the Budget attempt to strengthen our social safety nets but its wider coverage promotes inclusiveness to meet the challenges of the day such as income inequality and the perceived decline in social mobility. Much as we tend to see the Budget in terms of what is in it for us, the Budget must also support the social compact that will keep Singapore society cohesive, stable, and confident of the future.

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Overall, I like the tenor and emphasis of Budget 2012. It makes a concerted effort to recognise that not all Singaporeans have benefited equitably from Singapore's economic progress in the last two decades. I hope we will build on the inroads, catalyse mindset changes, and take a refreshing look at how the Budget is a barometer for the type of society we aspire to be. This will help Singapore and Singaporeans meet the lofty ideals enshrined in our National Pledge and National Anthem. Sir, I support the 2012 Budget Statement presented by the Finance Minister.

2.58 pm

Ms Denise Phua Lay Peng (Moulmein-Kallang): Sir, widely acclaimed as the "Budget with a Heart", this year's Budget delights the three targeted vulnerable groups – the elderly, the disabled and the low-income earners. It honours Government's promise to ensure that these groups, too, have a part in Singapore's progress and will not be left behind.

With the exception of Small Medium Enterprises (SMEs) who feel the stress from further tightening of foreign labour inflow, there was much approval and respect for this Budget that takes care of the more vulnerable. So, kudos to Deputy Prime Minister and his team. Sir, I have five observations and five recommendations for Budget 2012.

Observation One. Budget 2012 is a sobering reminder of the inevitable outcomes of Singapore's efforts to survive in an open global economy. Our survival strategy comes at a price of (a) higher cost of living, and (b) wider income gaps between the highly skilled, the globally mobile wage earners and their lower-skilled fellow citizens. Both consequences – higher costs and growing income gaps - are unlikely to disappear. And Budget 2012 signifies that transfers such as the GST Voucher Scheme are a key way to redistribute incomes and are here to stay. That the GST Voucher Scheme is made a permanent feature of Singapore's social safety net marks the crossing of a psychological chasm, conquering the ruling party's wariness and reluctance to guarantee payouts that run the risk of an entitlement mentality.

Observation Two. Budget 2012's comprehensive measures for the elderly also recognise the need for a more aggressive Total Solution to support Singapore's rapidly ageing population – in employment, healthcare options and costs, retirement financial planning and housing.

Observation Three. Budget 2012 confirms that despite being a country with one of the lowest birth rates in the world, the Government or the Deputy Prime Minister has decided that further financial incentives will not yield more babies and other more effective solutions will have to be deployed.

Observation Four. Budget 2012 underpins a strong belief that for political, social and economic reasons, the increasing dependence on foreign workers is not tenable and the Government will face head-on the resistance of SMEs which form 99% of the total number of enterprises in Singapore; and, last but not least, Budget 2012 has answered the cry from a small segment, about 3% of Singapore's population – the persons with special needs or more commonly known as persons with disability.

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Together with the 41 recommendations from the recently submitted Enabling MasterPlan for the Disabled to Government, Budget 2012 responded to the call from this community to be seen, to be heard and to be treated as valued and equal members of the Singapore family. It provided for greater support to maximise their potential of persons with disabilities at key stages of their lives – at education, employment and adult living.

As a VWO volunteer, as a service provider and a client of the special needs community, I thank the PAP Government.

Sir, I would like to make five recommendations for the Deputy Prime Minister's consideration to further improve the Budget provisions:

(1) to make Special Employment Credit (SEC) permanent for the elderly and the disabled;

(2) to expand the Special Employment Credit to cover more persons with disabilities (PWDs);

(3) to strengthen Singapore's progressive personal taxation structure;

(4) to review the defence expenditure as one source to fund the transfers; and

(5) to establish an agency to focus and nurture local Small and Medium Enterprises (SMEs).

Recommendation One. Make Special Employment Credit (SEC) permanent for the elderly and the disabled. Sir, while I am extremely grateful for the SEC for the elderly and disabled, I believe there is merit to consider making this feature of the social safety net permanent. This will go a long way to reflect the value that society places on these vulnerable members; to encourage them to work where they can instead of collecting welfare; and to develop a reliable alternative to the foreign workforce. It will also assure employers that the incentive will be available not just for a short term and incentivise them to employ people who are elderly or disabled.

Recommendation Two. Expand the Special Employment Credit to cover more persons with disabilities (PWDs). The Budget provides for Special Employment Credits only for graduates from VWO-run Special Education (SPED) schools. While I appreciate the confidence that the Government places on these 20 SPED Schools, I wish to remind the Government again that there are many persons with disabilities out there in Singapore who did not attend or graduate from SPED Schools. They are either from mainstream schools, or are home-schooled, they stopped schooling or never been to school. Their potential or current employers should not be deprived of the SEC incentives for employing them.

In fact, just last night, I received various SMS confirmations from many VWOs representing the hearing-impaired, the visually-impaired, the physically disabled, those with muscular dystrophy and autism, and they confirmed there are at least a few hundred of them out there who are not special school graduates. Many of them are able to work if they are provided the training and support and if there are willing employers.

The call for an extension of coverage to include this group of non-SPED graduands is the same call that I made when the Special Needs Savings Scheme was introduced earlier this year which similarly excluded them. I, therefore, ask the Government to expand the Special Employment Credit to cover persons with disabilities who did not graduate from special schools.

Next, Sir, on how the increasing social expenditures are ultimately going to be funded. The hon Member, Mr Vikram Nair, mentioned that. I had spoken earlier that Budget 2012 is a sobering reminder that widening income gaps are here to stay and the Government is acknowledging that the gap has to be addressed through transfers to the lower income group.

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I would like to propose two ideas to fund the increasing social service expenditures. One, through personal income taxes payable by higher income wage earners; and, two, through budget re-allocation, in particular from defence.

Sir, the Singapore personal taxation system is progressive and levies taxes according to one's income. Hence, an individual with high income will pay more in taxes than an individual with a lower income. A good progressive tax system ensures income redistribution but, at the same time, also has to ensure that high-income taxpayers are not demotivated from taking on higher paying jobs or, worse, emigrate to more tax-friendly countries.

Although our traditional fiscal strategy is to keep Singapore's corporate and personal income tax rates low to compete with the likes of Hong Kong, there is merit to consider strengthening the progressive nature of the personal income tax system. The highest income tax rate for anyone earning a taxable income of over S$320,000, today in Singapore, is 20%. This is way below the tax payable rate of 30% to 50% by higher-income earners in countries such as the Nordic countries, Australia, New Zealand, China and the US.

Singapore is reputed to have the highest proportion of millionaires in the world. Perhaps those who are most blessed can be persuaded to bear more responsibility for the society in which they live. I ask the Government to review the personal taxation system and consider having Singapore's top income earners who have benefited from Singapore's solid infrastructure, growth policies and public goods to bear some of the responsibility of funding the transfers to the poor and needy in society.

Recommendation Four. Review budget allocation, in particular defence. Another suggestion I would like to propose to help fund future social needs is to review the traditional way the Budget is allocated. Sir, defence traditionally consumes the highest proportion of total Government expenditure each year. This year's allocation, for instance, represents close to 25% of total budget and even sees an increase of 4.3% from last year – about $12 billion, I believe.

Sir, whilst I know that the security of our small nation-state is critical and defence is not an expenditure to be dispensed with easily, I urge the Government to study the optimal resources Singapore should expend on defence versus other new and pressing social needs. The study should consider the changing nature of warfare the defence team has to wage, from traditional to cyber wars and terrorism; and balance it with the upcoming and costly social needs of a maturing Singapore.

Last recommendation. To establish an agency to focus and nurture local small and medium enterprises. Sir, Budget 2012, whilst popular with many Singaporeans, I understand, received a cool response from some 150,000 SMEs who are concerned with the further restriction on foreign labour inflow. These SMEs employ more than 50% of the workforce in Singapore. And the wellness of this critical group of companies is important to our country.

In a full employment market, many SMEs continue to face difficulties trying to find local employees needed to support their business growth. Besides labour constraints, the key challenges they face are high costs especially in rentals and material costs as a result of higher oil prices, for example.

According to a very positive SME owner I surveyed last night, the leap would require more than the writing of cheques by the Government. Many SMEs aspire to innovate and make the leap from being an SME to a big multinational. Who would not want that? But many of them also know that the Government is very serious about its economic committee strategies and SMEs who do not make the change or the cut will have to exit from Singapore.

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However, transformation through productivity and innovation is easier said than done. Not through one-time process re-engineering or one-time grants, but through building a culture of productivity and innovation which, from my experience, takes at least two to three years to build, if well done. Sending employees to training when the organisation is fighting operational fires due to a shortage of workers seems counter-productive. Training that is not reinforced by workplace practices – by the bosses – is also similarly counter-productive.

Despite SPRING's efforts, many SME owners are still unsure about what grants there are, who to apply to and how to apply for the numerous grants. If the full suite of financial schemes and incentives that the Government is providing does not yield the take-up rate and the desired outcome, then, surely, the root causes have not yet been completely addressed. Sir, unless we address these root causes on the ground, it is likely that the Government's well-intended schemes will not bear enough fruit and many entrepreneurs will leave the scene.

My recommendations, on behalf of SMEs, are as follows:

(1) In the face of a full-employment labour market and the difficulty of trying to build a culture of productivity and innovation, I urge the Government to be more empathetic to the SMEs in approving Work Pass applications for proven foreign employees who are working in, one, industries which traditionally do not hold certificates or where jobs do not come with certificates; and two, industries in which jobs are not easily filled or shunned by locals such as in cleaning, healthcare, F&B and public housing construction, amongst others. I would also ask the Government to be more empathetic in approving PR and citizenship applications to skilled foreign employees who have served in Singapore for many years and who have raised families in Singapore;

(2) Next, I urge the setting up and staffing of a Special SME Unit with corporate turnaround leaders and experts in various disciplines that can be deployed to nurture and transform high-potential SMEs to play in bigger leagues; and

(3) I also propose the assignment of SME Account Managers to conduct more effective communication and handhold SMEs on the use of available productivity and innovation schemes.

In conclusion, Sir, Budget 2012 is not only a Budget with a heart that targets the three most vulnerable segments of Singapore's population. It is also a Budget from a head that knows that unless it takes the unpopular step of managing the otherwise unstoppable escalation of the foreign workforce, the DNA of Singapore will change for the worse. But the hands of execution play an important part too. The quality of execution and the readiness to finetune the policies when needed will determine, finally, the Budget's success. I thank the Deputy Prime Minister and his team and the Prime Minister for this well-crafted Budget. Sir, I support the Budget.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.35 pm.

Sitting accordingly suspended

at 3.15 pm until 3.35 pm.

Sitting resumed at 3.35 pm

[ Mr Speaker in the Chair]

DEBATE ON ANNUAL BUDGET STATEMENT

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Debate resumed.

Mr Hri Kumar Nair (Bishan-Toa Payoh): Mr Speaker, thank you for letting me participate in the debate. I share most of the sentiments expressed by fellow Members on the Budget. It stands apart from Budgets of the past. One aspect I note is that the Budget did not attempt to give something to everyone. In times of economic uncertainty, our spending must be focused to meet national objectives. It makes less sense to give hong baos to everyone, whether they need it or not. One more dollar which goes to someone who needs it less, means a dollar less for someone who needs it more.

I also support the Budget because it strikes a balance between encouraging Singaporeans to succeed through their own efforts, yet recognising that you have to do more to level up society, and help those in need. Because that is the hallmark of any inclusive society − or tribe as Mr Baey calls it − every citizen instilled with the unshakeable belief that the well-being of their fellow Singaporeans is important to them and a fundamental part of our national mission.

There is, however, a temptation in such debates to focus on areas which the Government could do more or has not addressed. Anyone can, without much effort, think of something we can spend more money on or areas they want the Government to pay more attention to. We all want to be as inclusive as possible but our resources are not unlimited. It should not be how much we spend but really the outcomes we achieved. Mr Inderjit Singh and Ms Sylvia Lim both talked about increasing healthcare spending, and that is a good example. In the US, for example, US spends 18% of their GDP on healthcare. And this compares to about 9%-10% of European countries. But the outcomes in European countries on healthcare are much better – longer longevity, life spans, healthcare outcomes, infant mortality. So it is not about how much we spend but the outcomes we achieved. The real challenge is about getting our spending priorities right, and to be smart about how we spend, where we spend, why we spend, so that we can make a real difference to the lives of as many Singaporeans as possible on a balanced Budget.

One of the key concerns all Singaporeans have is, of course, growing old and the challenges that it will bring − lack of employment opportunities, rising cost of living, healthcare and housing. It affects not just the older generation, but the younger generation as well, as they know that they have or will have the responsibility of looking after their parents, of making sure that they lead comfortable lives. And they know that they will too grow old one day.

I therefore applaud the many measures in the Budget which are targeted at helping the elderly. It has been said many times that ours is an ageing society, and the challenges we face today are only going to grow with time. I accept that it is impossible for the Government to address all these challenges in a single term, never mind a single Budget. These are measures which have to be rolled out, modified and sharpened over time. But it is important that we put in place the building blocks of our plan to meet an ageing society as soon as possible.

In this regard, I would like to touch on three specific areas which I hope the Government will look into to help our elderly citizens, and then end by making a broader point.

First, the enhanced Lease Buy-back Scheme and the Silver Bonus Payment to encourage the elderly to purchase studio apartments. I support them because they are an improvement to what we have now. This was an issue I spoke extensively about during the debate on the President's Address − the weaknesses of the current Lease Buy-back Scheme and why it will not help the elderly. But I hear the improvements still would not address certain fundamental difficulties.

The situation we have now is that many elderly are asset rich but cash poor. They live in flats which are fully paid up, and worth many times what they paid for them. But as the Finance Minister said, they do not have much in their CPF or the bank, as they worked in times when wages were low. Retirement planning was not a luxury many of them could afford. Some, for one reason or another, cannot turn to their families for help. That will be a growing problem as most Singaporeans do not marry or have fewer children. The only sensible solution is to help them monetise their homes, and address that imbalance between cash and property.

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Selling and moving to a studio apartment is the neatest way to do this. A new house, a fresh 30-year lease, cash surplus which should get you by comfortably for your remaining years. But Studio Apartments are currently not easy to come by. And even if we build more, it may be difficult for the elderly to sell off their current homes, break ties they have developed over the years, and start all over again in a strange environment. A recent Straits Times article published interviews with a number of elderly, who expressed those very concerns. Do we really want them to move? This cannot be good for their well being. We want them to grow old among friends and people they know, people who will look after them.

To allow the elderly to continue living in their current homes, we introduced Lease Buy-backs a few years ago. But it proved very unpopular, with very low take-up rate. For the reasons I gave in my earlier speech, I can understand why. It only applies to 2- and 3-room flats. The monthly payments are low. There are also a number of disadvantages. The payments are based on the present day value of the flats as determined by the HDB, which means that the owner does not benefit from any rises in property prices. He, in fact, suffers inflation. And once he signs on, he cannot get out. So, he can no longer sell his flat or bequeath it. And when he passes on, the flat is taken back by the HDB and the remaining value cashed out and given to his beneficiaries. The new changes will increase the amount of payout, both upfront and monthly. But I suspect the other disadvantages I have outlined will not make the enhanced scheme much more popular.

I, therefore, urge the Government to come up with further options or choices to help older Singaporeans unlock the value of their HDB flats, which will not only allow them to stay where they are, but allow greater flexibility than the current Lease Buy-back Scheme. At the debate on the President's Address, I suggested a scheme which will allow Singaporeans to sell back portions of their lease to HDB. A 70-year-old couple does not need a 50- or 60-year lease. If they can sell part of their lease back to HDB, and for the proceeds to be given part in cash and part paid into CPF, that would give them a decent sum to meet immediate needs, such as the costs of an operation or other medical needs, as well as daily expenses. Only a portion of their lease will be valued at current prices, which means that they will still benefit from future property price increases and the effects of inflation are reduced. They will continue to have the option to sell the flat and buy a studio apartment, when one becomes available. Or they can leave the flat behind for loved ones.

Sir, the second aspect: private property owners. There were two notable changes in the assistance given in this Budget. First, unlike in the past, no or little distinction is made in the benefits given to those living in different HDB types. This is welcome, as we know from the ground that the size of a person's flat is not an accurate proxy of his financial needs.

The second is that owners of smaller private properties, about 15% of the market, will enjoy benefits as well. I can understand why we make distinctions for private homes. Those who live in larger private homes are generally considered wealthier, and they certainly have more options. But there are a good number of them owned by elderly retirees who purchased their homes when they were considerably cheaper, and who are now in the same boat − small bank and small CPF balances. Some may argue that if they need cash, they can sell their homes and downgrade quite comfortably. I think that is easier said than done. Again, it is a solution which forces them, in their golden years, to move away from their homes, their friends and places they are familiar with. They have another challenge, which is this. Because of the significant rise in private property prices in recent years, many of them have seen a substantial increase in the annual value of their homes, and therefore the property tax they pay. But the rise in annual values does not help them as they derive no income from their homes and the increased tax they pay is a further draw on their cash reserves. Would the Government therefore consider a lower concessionary property tax for elderly, retired couples? It would, of course, not apply if they have other investment properties or income.

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The third specified issue deals with improving infrastructure to help the elderly become more mobile. One example of this is an old chestnut – lifts for overhead bridges. This has been brought up a few times in this House. The Land Transport Authority (LTA), I understand, is building lifts for bridges at transportation nodes, but it numbers about six. For an elderly person, the inability to climb the stairs of an overhead bridge means, in some instances, taking long detours just to cross a road. That presents them with even more difficulties as walking itself is a struggle for many. Hence, the temptation to jaywalk, putting life and limb at risk.

There are 484 overhead bridges in Singapore, but there will be no need to upgrade all of them. Some already have, or are able to have, ramps; others are near enough to signalised crossings for the elderly to use; others do not see much use. I urge the Government to start a pilot project to install selected overhead bridges with lifts, and assess the impact.

I know this will be expensive, but I believe it will be worth the price to help the elderly be more mobile and independent. Over time, more of us will need it as our own knees give way and legs go weak. The HDB is currently implementing a programme to install lifts for multi-storey car parks. Is that really a more worthy cause? The Lift Upgrading Programme has released many elderly people from the prisons of their own homes. We have made our public housing estates, buildings and places of interest barrier free. The road represents the final barrier, and I hope the Government will help the elderly cross it.

This brings me to my final and broader point. The Budget initiatives for the elderly are intended to enable an elderly person to live safely and in comfort, and when ill, to encourage him to recuperate at home, with his family and loved ones around him, and this makes sense. We must, therefore, build more Studio Apartments, nursing homes and Eldercare Centres near where we live, so that the elderly can have access to amenities such as markets, parks, and bus-stops. The Government wants to build more of these facilities – but where are we going to put them? The answer is obvious. We need to build them within existing housing estates. That will enable our elderly to live within the community. It will also enable them to be more independent, since they will be living near the amenities they obviously need.

The problem is that some of us do not want such facilities near our homes. There has been much discussion in the media about residents in Woodlands and Toh Yi Drive opposing the building of Eldercare Centres and studio flats. These are treated as isolated incidents to be resolved at the local level, but they are not. Is there any doubt that there will be similar reactions if these facilities were proposed in other estates? There are too many similar examples. A couple of years ago, residents of one constituency even objected to building rental flats in their estate. The Government is in an impossible situation, as I see it: (a) if it builds without consulting residents, it will be accused of not listening; (b) if it consults, and builds, it will be accused of engaging in theatre; (c) if it consults and does not build, it will not be able to build anything anywhere in the future.

The fact remains that facilities for the elderly have to be built. They have worked hard all their lives. In their sunset years, they ought to occupy a special place in our community, and not be told to go somewhere else. This is not a Woodlands issue or a Toh Yi issue, this is a national issue, and we need a national plan to address it.

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The Government must be able to project how many such elderly facilities it intends to build around Singapore in the short, medium and long term, and where they generally should be located or will be located. This should be shared with Singaporeans, so that the matter is not dealt with on an ad hoc basis, but the issue is treated as being in everyone's backyard. When we sell BTO flats, we should indicate what amenities may be located within the precinct so that all purchasers will know what the future plans are and no one will be taken by surprise. We also need to review the design of our flats. We should have fewer stand-alone studio apartment blocks, and more elderly apartments distributed within the block, so that parents and children can live separately but close together. Many elderly I have spoken to would prefer this model. They too find it depressing to live in a block occupied entirely by the elderly. We should ask them what they want. So, we need a national plan which meets national objectives and, more importantly, we need Singaporeans to get behind the plan and support the Government.

Sir, the best Budget initiatives we can think of will fail unless we get the basic principle right – that we are doing this not because it is convenient or cost effective, but because it is the right thing to do, and we are faithfully serving that unwritten commitment that we will love and honour our parents and our elders. And in time, we hope that all our children will do the same for us. I support the Budget.

3.49 pm

The Senior Minister of State, Prime Minister's Office (Mr Heng Chee How): Thank you, Mr Speaker, for allowing me to join this Budget Debate. To me, the most important message of this Budget is about preparing Singapore for the future. This future is one where we expect significant challenges: more physical constraints being felt – of our land, of water, of air space, of transport capacity; of a more aged population; also a population that will have ever higher expectations and sometimes less willingness to give and take, and I think the hon. Mr Hri Kumar has just very eloquently illustrated that in respect of the building of elderly facilities and I agree wholeheartedly with him.

But this future is also one that holds much promise: the promise of a stronger Singapore core workforce; a country capable of sustained, reliable Whole-of-Government, Whole-of-Society responses to problems and possibilities, a people that sees seeking the greater good and the common good as important as advancing self-interest. For today, I just wish to focus on the importance of building the Singapore core workforce.

I recently travelled to the Chinese city of Chongqing. At the Singapore airport, I popped by the book store and I saw and picked up a copy of the March issue of the Harvard Business Review . I did that because what was on the front cover attracted me. The title says "Special Report: Reinventing America – why the world needs the US to bounce back; and Stop blaming China and India for America's economic problems".

Inside the magazine, article after article, author after author, cried out for action to move the American economy and the American workforce back on track. One article has the title "A Jobs Compact for America's Future", which called for productive dialogue among their tripartite partners, and for renewed badly needed investments in the reading and math education for its young and for strengthening the capabilities of the American workforce. Another article entitled "A Warning Sign for Global Companies" sounded the alert that America needed to do more to attract and retain MNCs on its soil if it wants the jobs and the technological lead that such companies produce and bring. A third article called "Fixing What's Wrong with US Politics" lamented how the urge for one-upmanship in American politics has resulted in dysfunction and malaise, and the loss of long-term focus.

I said to myself: if this is how the Americans are coming around to seeing their situation and are agreeing on what they need to do to forge ahead, and if they have that will then they will indeed forge ahead! As it stands, American productivity is already higher than ours. So, where would Singapore's position be in that scenario, competing with such a revitalised giant that is bent on getting even better?

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And so, then I flew off and landed in Chongqing around noon, and after a quick lunch, headed for a dialogue with some city officials. We were briefed by several officials in the areas of overall economic development, trade, finance and manpower development for this mega-city of 32 million people.

The officials relished, in fact they gushed, in their descriptions of how fast their city has developed in the last decade, and especially in the past several years. They highlighted their ambitions and their plans for rapid urbanisation, industrialisation and internationalisation – and how successful they had been in taking investments and jobs from the big cities out there on the east coast of the country, and how a growing list of big name companies are converging and clustering into Chongqing, lured by promises of cheap land, cheap utilities, cheap logistics, cheap financing, cheap manpower.

But one thing really struck me – and that was that the officials spoke of how they have systematically sourced cheaper manpower first from the city, then its suburbs, then from the countryside and then surrounding towns and surrounding provinces. Why did they do that? They did that to lower manpower costs by bringing in cheaper manpower than what they could find in the city itself. And they were proud that that strategy had given them that pricing advantage over the coastal cities, and had persuaded some companies to relocate away from the coast inland into Chongqing. That strategy sounded very familiar indeed. And I asked myself: can we outdo the Chinese cities in such manpower sourcing? Can we do that now, or in the medium term, or in the long run? And if we cannot, then what would become of our economy?

And then to my amazement, the Chongqing officials went on and they said that they also knew that this "cheap sourcing" – those are not their words, "cheap sourcing" are my words – this way of sourcing for cheaper manpower, this strategy was not sustainable, in their view, in the long term, even for them in China because they saw what happened to the coastal cities as development picked up speed. First, cheaper locations will emerge and will always look increasingly attractive. So, if today you can take it from Shanghai, tomorrow somebody will take it from Chongqing. So they knew that. Second, as the surrounding areas develop, the residents in those areas would be able to find decent work without venturing further afield. It would then become more and more difficult to amass cheap manpower that way and they have to foster competitiveness differently for the medium to long term. And for this reason, they are aiming to use the cheap factor strategy to buy time to develop into higher value production and services, so that they would not be caught in the lurch eventually.

I told myself: Singapore had better watch it and get our act together fast. For many years, we have fuelled our growth through growing the size of our workforce both internally and then by introducing external manpower to supplement. And this has successfully brought us to where we are today. To go further, we have to pick our approach wisely. We have to judge whether relying on an ever expanding inflow of external supplemental manpower will secure our competitiveness now and in the long term. And what makes us think that the economic development that will occur in the home countries of our foreign labour sources would not naturally reduce the need and the desire of their populations from wanting to leave home and work abroad? And if that happens, and if we are still bound to a model that critically depends on the free and abundant availability of external manpower, then would we not be exposing ourselves to unacceptable risks? And even if that does not happen, would we not at least be slowing the pace of innovation and transformation simply because the painkiller was there for us to take for the moment?

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Sir, the experiences of America and China in the past and their strategies for the present and future are important sign posts for us. Those ahead of us are recommitting to strengthening their core attractiveness, competitiveness and innovation in order to stay ahead. Those behind are milking all the advantages of their natural resource endowments to steal a march on the others, while simultaneously retooling for progress and success in a more resource-scarce future. Singapore must not spin our wheels and live in the past. Our methods must change in the light of these realities, and climb. And we must climb the productivity and innovation ladder as quickly as we can, while time and opportunity permit.

In this regard, I have seven ideas to suggest for consideration.

First, as this transformation will impact the whole economy and, understandably, SMEs would be amongst the most impacted, there must be positive outreach to them, and not just a passive array of schemes for them to come forward to tap. We have heard from hon Members that, every day, SMEs are fire-fighting. They have limited capabilities. They are too busy. They have many limitations. A positive outreach towards them is absolutely necessary to begin and sustain this transformation.

Second, close monitoring of job displacements so that help can be extended early and in a targeted manner. Again, we heard from Members that we have to bite the bullet. It may be painful. Some may have to close shop; some may have to go elsewhere. There may be workers from them that would have to lose their jobs, and then what happens? And if we want to keep that pain to the minimum, if we want to help as many of such displaced workers as possible, then we need to know where these things are happening, where the retrenchments are taking place, where the shutdowns are taking place so that we can direct our attention and our help in a prompt, timely and effective manner. So, the monitoring is important.

Third, not only monitor but what do you do when you find such a worker? Therefore, job banking must be stepped up. As more businesses are impacted and their workers have to move to new jobs, job banking and job matching will become a critical success factor. We have traditionally thought of job matching, job banking in a context of an economic recession – cyclical. But now we are attempting a transformation of the economy, so we must also expect displacement to take place. Therefore, we also have to strengthen our capabilities in this area and deploy them to good effect.

Fourth, outreach must be done in different languages and not only in English, to take into account the reality facing many SMEs. In other words, many of the bosses of SMEs may not be fluent or effective in their English and, therefore, our help schemes must be business-centric so that they can then be worker-centric.

Fifth, the connecting of labour supply to labour demand through re-employment, through back-to-work women workers and the upgrading of jobs, technology and the image of SME jobs must be stepped up, so that companies can have a viable alternative to external manpower sources. So, not only to tighten the tap of foreign workers coming in but also to address where do they find the workers that they need. There are internal sources that we can further unleash and we must do that and help to make that connection. The better we do so, the less the pain for everyone.

Sixth, wage levels must be monitored to give an ongoing sense of how the transformation is actually impacting the outcome for workers at all levels. That is, on the positive side, as we transform and as the value-add goes up, we want to see that translated into better wages, better livelihoods for our workers. And we cannot assume that that would naturally take place. We have to monitor and make adjustments, if necessary, to ensure that that takes place.

Finally, I propose that a national level award be created to recognise and motivate companies, big and small, for their effective and genuine efforts and initiatives to create and nurture a Singaporean core workforce. Mr Speaker, Sir, we must put away any wishful thinking and hunker down to search for new and smarter ways to use our manpower, and to sharpen the capabilities of our manpower. We must build our Singaporean core before it is too late. I support the Budget.

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4.02 pm

Mrs Lina Chiam: Mr Speaker, Sir, with this Budget, the Government has belatedly and accurately recognised how serious the problem with our over reliance on cheap foreign labour is for our economy. The flood of cheap foreign labour had provided Singapore with an unsustainable economic model, a phenomenon that is akin to the use of performance-enhancement drugs in sports.

Growth of the economy is our end goal. Sustainable economic growth that brings about prosperity of Singaporeans across the spectrum should be the ultimate and key measure of our economic performance. To enhance productivity in our industries, we have to think out of the box for more creative solutions, especially during this tough economic year. Here, it is important to highlight that the business environment must be conducive for SMEs to grow alongside MNCs that are brought in.

Recently, complaints about labour cost, cost of businesses and factory or warehouse rent that plague local businesses have been raised. The Government should address these issues that compromise the entrepreneurial abilities of our Singaporean businesses. Nonetheless, the Singapore People's Party believes that the Government should be credited for the various enhanced schemes catering to the elderly, those with disabilities and lower income families, in the push for a more inclusive society where no Singaporean is left behind.

CPF and Retirement: Silver Housing Scheme. In providing for the retirement needs of Singaporeans, we question the use of the Silver Housing Bonus. If the policy is intended to help Singaporeans benefit from the sale of their homes, this scheme is both impractical and unsuitable from a financial perspective.

Firstly, a home-owner will forgo a significant sum of sales proceeds for future consumption through the CPF LIFE annuity. For a Singaporean who has short-term liquidity needs, this scheme does not help. Moreover, for retirees, they do not enjoy lower property tax even though they no longer draw a salary.

Secondly, for other home-owners, this sum that goes into the CPF is not automatically adjusted for inflation. If a Singaporean takes up the scheme without a long-term perspective, the real value of his money in his CPF account might diminish with inflation.

Retirement funds should be pegged to the inflation index. This could take the form of an inflation-protected scheme pegged to forecasted inflation. The Government should also consider adjusting downwards the amount of proceeds from the sale of homes that have to go into CPF accounts.

Perhaps, we should also take a step back and ask ourselves: what do we really want to achieve with our Home Ownership schemes? What does it mean to buy a home, only to sell it away when we grow old, because we need cash badly?

Higher CPF contribution rates for older workers: to help older workers better prepare for their retirement, the CPF contribution rates for workers aged above 50 years will be increased from 1 September 2012. The CPF contribution rates for those aged 50 to 55 years will eventually be raised to reach the full CPF contribution rate of 36%.

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A 50-year-old man will be less than 20 years away from retirement. He would have worked for about 25 years of his life. If the Government aims to better prepare Singaporeans for retirement, the scheme should offer a higher contribution rate at an earlier age so that the effect of interest rates compounding will have a much larger impact on the individual retirement fund.

If the concern is to better prepare Singaporeans for retirement, the Government will have to administer a more focused set of tools for aged needy Singaporeans. Increasing CPF contribution when one reaches 50 years of age may be too late. If the aim is to increase contribution at all, the earlier the better. Increasing CPF contribution only at the age of 50 makes little policy or financial sense, especially at a time of their life when their salaries may actually start to dip. Working Singaporeans younger than the age of 50 could be given incentives to start accumulating funds in their Supplementary Retirement Scheme accounts, to enjoy practical benefits from tax savings.

CPF for older women: let us not forget about the situation of CPF for older women. Compared to their counterparts in developed countries in the West, the labour participation of Singaporean women tends to fall much earlier in the course of their lifespan. And since the economic development of Singapore was achieved within a shorter and at a later point of time in history than most developed countries, it also means that older Singaporean women today are less likely than their counterparts to have gone to university. This has crucial implications for late-life employment. All these point to the problem of income inadequacy for older women, especially when they are physically unable to work. They have longer life expectancies than men, but the assumption of our CPF policies is still that men are the main breadwinners in these families, and that CPF payouts for older women largely assume that they depend on their husbands – if they are even married in the first place.

Sadly, some of our younger women today may also face these concerns when they grow old. We still hear many complaints of wrongful dismissal of women from work when they are pregnant. This may be more an issue of employment practices, but CPF policy is integral here too. In developed countries like Sweden, for instance, women can get pension credits when they are on maternity leave, in recognition of their role as caregivers. This calls for a substantial re-think of the CPF model, to build a better social safety net for older women.

Healthcare: CPF MediShield for retirees. I would like to ask whether the Minister for Health would consider allowing Medisave to make payments for rider supplements to co-insurance and deductions, and whether he would increase the withdrawal limit of $800 per policy year to pay for private Medisave-approved Integrated Shield Plans, for policy-holders aged between 60 and 80 years. This group of people, who are mostly retired, need to use their insurance policies to the fullest, in the event of a major illness, for which treatment can amount to hundreds of thousands of dollars in medical bills. This is often an amount that cannot be adequately covered by MediShield schemes. Topping up requires a few hundred dollars, and most of these retirees are cash-poor. The irony is that they may have a lot of money in their Medisave account, but cannot make use of them to top up or upgrade due to the withdrawal limit of $800. Currently, only Singaporeans who are 80 and above could use the maximum of $1,100 per policy year which, frankly, is quite ridiculous – not everyone can live beyond 80 years of age.

Higher medical contributions and higher subsidies for care: subsidising needs is a short-term solution to a long-term concern. Medical fees have increased over time. The Government should conduct a benchmarking exercise of our medical cost against other developed countries. We should not allow medical fees to continue ballooning just because we fool ourselves by thinking their increase can be covered by the Medisave provisions and subsidies available.

Note that increasing MediFund top-up will only decrease cash-on-hand for Singaporeans, since it comes from CPF contributions from their salaries. This is not sustainable in the long run. The solution for increasing medical fees cannot always be a one-sided reduction of cash from the pockets of Singaporeans. Instead, the productivity and efficiency of our healthcare industry should be increased, in line with the general thrust of this Budget. Here we have some suggestions towards this end:

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Introduce virtual medical consultancy for general illnesses. The Government should consider merging all national wide healthcare records in digital format so that patient records can be easily transferable. The Ministry of Health can also track medical trends and detect anomalies in quicker time.

More Hospital Beds: by 2020, the number of hospital beds will increase by 30% for acute hospitals and 100% for community hospitals. Increasing hospital beds is not the best solution to provide for adequate medical services. As the society ages, recovery beds will be high in demand. Hospitals will have to further divide the demand for beds into two levels – hospitalisation and recovery needs. Between the detection and surgery phase, the patient will have to stay in the hospital. After surgery, patients can stay in recovery beds that will require less intensive medical investments. Recovery beds can be housed in facilities adjacent to hospitals.

Transport: bus services. We were initially glad to hear that the Government will be improving bus services by paying for 550 new buses and funding $1.1 billion through the Bus Services Enhancement Fund. But on deeper consideration, we think all this masks a fundamental question. SBS Transit and SMRT are privatised companies that together enjoy a virtual monopoly over bus services in Singapore. Why is the Government using taxpayers' money to fund these two profit-making private companies to run their monopoly? These companies have been reaping huge profits for the past few years. SMRT's revenue for the financial year ending 2011 was $969.7 million. SBS Transit's revenue for the same period was $751.1 million. Are they not able to fund purchases of new buses and improve their operations with the profit made?

Much of public resentment towards SMRT comes from the fact that these profits were made on the back of transport infrastructure assets that were funded by the taxpayer, such as MRT tracks and roads. Yet these profits do not go back to the public purse. The costs have been socialised, but the profits have been privatised.

We call on the Minister for Transport to end the monopoly of the two bus companies. Taxpayers' money should not be used for what is in effect unfair subsidisation for these privatised corporations. Consequently, allow other private bus companies to be set up to serve public bus routes. This will also alleviate overcrowding in our transport networks. There could also be a Government-run bus company set up to enter the fray. This is a good way to force the existing bus companies to operate more efficiently in a true market situation, and not to rely on Government funding whenever they are incapable of getting their act together.

SMEs: we applaud the Government's continuing efforts to increase productivity in our industries, as a means to alleviate our over reliance on cheap foreign labour. However, we should not overlook the competitiveness of our business environment for SMEs. I do not have sufficient data to compare the level of incentives received by global MNCs – namely, through grants, tax relief, foreign worker quotas – with the level of incentives received by SMEs, so I will be asking for these data to be released in the House in the course of this year.

The media has reported complaints by SMEs regarding high factory space prices due to the role of real estate investment trusts (REITS) and the recent divestment by JTC Corp to the private sector. These are important factors that the Government must address and be accountable for. Over the past few years, Singaporeans have submitted feedback on food court and wet market acquisitions by conglomerates and larger organisations. Generally, if the rent charged to end-tenants increases, this will have two effects. Firstly, small businesses will find it difficult to sustain their businesses unless they pass the incremental cost on to consumers and, secondly, Singaporean consumers will be faced with higher consumption costs.

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In conclusion, Mr Speaker, my hope is that the Government will not waver in its goal to build a more inclusive society in successive Budgets. Let us continue further in this trajectory. In my speech, I have shown that what the Singapore People's Party's desire for Singapore is not the kind of excessive welfare-state system that will snowball to a situation of spending beyond our means. Rather, we are putting forward logical and fair policy recommendations that a developed, advanced country like ours should naturally strive towards. We also hope that the Government will not always demean other countries when raising examples of the so-called "slippery slope to an excessive welfare-state model". Instead, let us focus on building a fair society that values inclusivity as well as hard work. Thank you, Mr Speaker. I support the Budget, and I thank the Finance Minister, Mr Tharman Shanmugaratnam, and his team for preparing Budget 2012 for an inclusive society and a stronger Singapore.

4.17 pm

Mr Teo Siong Seng (Nominated Member): ( In Mandarin ): [Please refer to Pg 1401-1404 for Vernacular Speeches.] Mr Speaker, Sir, I am the President of the Singapore Chinese Chamber of Commerce & Industry, and the Managing Director of Pacific International Lines (Pte) Ltd. This year's Budget is an inclusive, compassionate and pro-people Budget, focused on looking after the elderly, lower-income and people with disabilities. We feel deeply moved and encouraged by this. The latest Budget emphasises the Government's determination to promote economic growth and increase productivity. Minister Tharman also pointed out that this year's Budget is a Budget for the future, the focus being to address Singapore's long-term challenges, and not to provide a counter-cyclic boost. Today, I would like to reflect some problems that are being faced by our businesses using three main points: human resource, an environment for SMEs' survival, and an inter-Ministry co-ordinating agency.

First, on human resource, this is what we call a "Move that Affects Everything". One of the focal points of this year's Budget is on the manpower resource policy: reducing the dependence on foreign workers, recruiting older workers, and improving productivity. Overall, we see the social benefit of this move. As the number of foreign workers is reduced, employers will naturally find all means to recruit local workers, including home-makers and part-time workers. However, not all jobs could be taken up by older workers or part-time workers.

A week ago, the General Affairs Council Member of the Singapore Canvas, Chairs & Tables Hire Service Association shared their predicament with me. Their members are involved in building tentages for all kinds of occasions, including weddings, wakes, night markets and all kinds of celebratory events. The working hours are very long and the work is physically demanding. The busiest periods are on weekends and public holidays. Hence, it is extremely difficult to get local workers for this industry. Currently, as the Government will be reducing the Dependency Ratio Ceiling for S pass workers, there will be an even greater tussle for local workers, especially young workers who are willing to undertake such manual labour. Employers are concerned that further down the road, they would not find workers to fulfil their orders for the National Day and the Chinese seventh month events. The Singapore Canvas, Chairs & Tables Hire Service Association hopes that given these special circumstances, those workers belonging to this trade could be grouped under the construction sector, and prevent the reduction in foreign workers from making a large impact on local customs and culture.

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Another major area requiring attention would be the training of older workers. One of our Chamber's members in the manufacturing sector had begun to encourage its older workers to attend training courses some three years ago. However, some older workers were more reluctant to attend the training, even when courses are arranged during working hours, and all fees are sponsored by the company. The company had no choice but to make some rearrangements and let the older workers undertake less physically demanding work. In the end, the older workers felt that this was an insult to them and did not cooperate. Thus, when the Government has decided to reduce the dependency on foreign workers, the training of older employees must be supported by a tripartite effort involving employees, employers and the Government.

I sincerely hope that in implementing the tightening in foreign worker policy, the Government could exercise greater flexibility by considering the circumstances of each industry.

Second, on SMEs: the difficulty of survival. SMEs are the most affected by this year's Budget. Although industrial restructuring is inevitable, we should try to mnimise the impact on social cohesion, and allow some breathing space for traditional industries that are still very welcome. Economic development is unstoppable, but once social cohesion is gone, it would be very difficult to get it reinstated.

In January this year, in a Mediacorp Channel 8 programme called "Tuesday Report", there was a report on Nam Hin Noodles Manufacturer run by Mr Pei Guang Nan. Mr Pei continues to produce different types and flavours of noodles according to his customers' requirements. Some street hawkers have moved into food courts but continue to use noodles made from Mr Pei's shop, enabling patrons to enjoy disappearing street flavours. Mr Pei's noodle shop at Balestier Road uses machines to produce noodles and is a family-run business. Although it is a small outfit, its products are very popular. After decades in the business, he has become fast friends with many of his clients. Mr Pei worries that if the Government wants to widen the road, he would have to move. In the current rental market, he fears not being able to find a suitable location to continue with his business, because he would face many constraints in applying for licences in a new location.

Singapore has many similar small companies plying traditional trades like that of Nam Hin Noodles Manufacturer, which, besides providing good food and employment opportunities, also work hard at preserving traditional food culture. I hope that the Government's policy-making Ministries would view things from a long-term perspective, and endeavour to build Singapore into a diverse and vibrant metropolis. Besides the MNCs and large enterprises, we hope that the Government would spare a thought for the SMEs, inclusive of those in traditional trades, so that they could have a chance at survival. Literally speaking, SMEs should be given the chance to drink soup while large enterprises are consuming the entrée. SMEs' existence would not only provide employment opportunities. More importantly, they have a part to play in creating a more vibrant society, offering more alternatives, and increasing social cohesion.

Next is about escalating rentals and increasing business costs. As with previous Budgets, the Government would roll out some welcome policies in response to the needs of the private sector, for example, providing the SME Cash Grant, and helping our enterprises to restructure their operations via the Productivity and Innovation Credit Scheme (PIC). Such policies are beneficial to many local enterprises. However, the problems faced by SMEs are the results of such policy changes. For example, JTC flatted factories were originally built to serve the needs of SMEs since 1968, but after divestment in 2008, rentals have continued to rise. The property companies are not in the wrong. Once they are privatised, they would have to show profits to be accountable to their shareholders. But some consequences need to be borne by the society as a whole. Could the Government provide alternatives for the SMEs and start-up companies? Apart from renting from large property companies, I recommend that the Government could provide properties, not driven by commercial gain, to serve as incubating centres, to support local start-ups and SMEs.

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Business costs are continuing to rise rapidly, and this has proven to be detrimental for some trades. From the beginning of last year, many bookstores, including large international and local bookstores, have folded due to the rental problem. Those which are still in business are languishing. Following the closure of Borders, the Harris bookstore belonging to the Popular chain and Page One have also just shut down. Page One's 24 overseas outlets are doing very well, but its main bookstore in Singapore has terminated operations. Another small niche bookstore, BooksActualy, had to move three times because of the rental problem, and managed to find a good spot in Tiong Bahru. However, because this little enclave has become a popular area for shops and eateries, the landlord also intends to increase rents.

Bookstores are places where culture and literary knowledge can be transmitted. In the large malls in Singapore, there is very little differentiation in retail mix. Eateries and clothing shops, arcades are becoming more common, while it is almost impossible to find any shops to feed the mind and the soul. This is not a healthy sign. In January, the Sunbeam Theatre, the only privately-owned Cantonese opera house in Hong Kong, announced its imminent closure due to rental problems, and attracted widespread public attention. Eventually, the theatre was preserved owing to public support and appeal. While Hong Kong is well-known for being very commercialised, it has bent over backwards to preserve such a cultural landmark. Could Singapore also consider the long-term interests of its people by providing such a subsidy for these more genteel and culturally-significant trades? Besides providing Government subsidy, the community could also work together and prevent Singapore from becoming a society which pursues economic gain to the detriment of its cultural and gracious identity.

Third, on inter-Ministry cooperation, solving difficulties of enterprises. More often than not, a Government policy could involve many different Ministries. At such time, there should be a lead agency to push through the implementation. For example, the National Productivity and Continuing Education Council led by Deputy Prime Minister Teo Chee Hean and the SME Committee led by Minister of State Teo Ser Luck are both good examples. The various problems faced by our enterprises would involve the Ministry of Finance, Ministry of Trade and Industry, Ministry of Manpower, and many others. Hence, I do hope that there could be one over-arching agency to facilitate the coordination.

Allow me to cite an example requiring a coordinating agency to take the helm. Recently, some local transport operators are getting very apprehensive. They are worried about manpower and space for their operations. For the first time, the Government will be helping public transport operators to buy new buses to relieve daily congestion in public transport. But those who will benefit are the listed companies which have already increased bus fares eight times from July 2002 to October 2011, and revenues have increased annually. This year, the Government will be setting aside $1.1 billion to fund the purchase of 800 buses, and this is certainly not a small amount. We hope that the bus fares will not continue to rise. The main concern for school bus companies and private bus operators is that 800 new buses would require more than 1,000 bus drivers. Where are these qualified drivers going to come from? If public buses need manpower, and they are unable to recruit foreign workers, then the school bus companies and private bus companies would face an even more challenging task in getting the drivers they need. Moreover, these companies stand to lose not only their qualified drivers to the public bus operators, but face a double whammy of recruiting fewer foreign workers.

Last November, we arranged for a ministerial dialogue, and invited 14 trade association members to take part. They hoped that the Government could open up some parking space for the benefit of the private bus operators. A representative from the Express Bus Agencies Association said that the express bus terminal at Beach Road was far too small, and therefore unable to accommodate the requirements of passengers. Currently, the related Ministry had installed surveillance cameras at the Golden Mile Complex express bus stand to control the parking of buses there. The express bus drivers had been fined heavily. One fine is $70, and with more of such fines, the companies' costs will go up. Participants at the dialogue suggested that the Government allocate an area in Geylang Lorong 1 near the People's Association for an express bus terminal, to resolve the overcrowding at the express bus stops and the fines for express bus drivers. Manpower shortage, the lack of a place to operate, increasing fines – these are all problems which concern three Ministries, namely the Ministry of Manpower, Ministry of Transport, and the Ministry of National Development. The companies in question are still waiting for an appropriate solution.

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In summary, as I have described, local enterprises, particularly the SMEs, will face a great deal of difficulties in the period of restructuring. If Singapore's business costs continue to increase, it is more challenging for the ultimate survival of SMEs, I fear that there will not only be fewer people willing to become entrepreneurs, but that the number of SMEs will also be reduced. If some trades vanish, workers would also face structural unemployment, and this would create a new social problem. From the businessman's viewpoint, whilst we hope to receive Government assistance, we should also continually improve the business model, raise productivity, treat workers well, and respect the contribution of the employees.

Frankly speaking, many bosses nowadays are heavily burdened by these pressures as they need to address high business costs, manpower shortage, and striking a good balance with employing foreign workers. While the employers try to cultivate their employees' sense of belonging, they should try their best to restructure the business model to achieve productivity. This is the responsibility of the bosses, and indeed not only to their workers but to the community and the nation at large.

Based on the experience of the last few decades, the successful restructuring of Singapore's economy has always relied on the close cooperation of the tripartite efforts among employees, employers and the Government. I sincerely hope that as we pursue the objective of increasing our productivity, and restructuring the labour force, we should stand united in the true spirit of tripartism to meet these challenges head-on.

4.32 pm

The Senior Minister of State for Information, Communications and the Arts and the Environment and Water Resources (Ms Grace Fu Hai Yien): Mr Speaker, Sir, I speak in support of this Budget. Many of us here are familiar with house visits. We visit our constituents, from house to house, checking on their state of affair. Very often, we are greeted by a woman at the door. Typically, we greet each other and ask, "How are you?" For most of them, we get the standard reply, "I am fine." " Ho bo ?" " Ho !" After conducting house visits for several years, I have learnt not to take the reply for granted. I would look for non-verbal clues from the resident. Does she look at ease? Is she in good physical and mental health? Is her household reasonably furnished and maintained?

After these few years of doing house visits, there are several faces that had left a deep imprint in my mind.

The first, a young woman, not much older than a child herself, with a young child in tow. With a maturity far exceeding her age, she tells you of her desire to recover from her mistake in life choices made when she was younger. Having dropped out of school prematurely, she can only take on low-skilled jobs and, therefore, low-paying jobs. She is a tenant in the flat, paying a substantial part of her income as rent, as her father was not prepared to accommodate her. Her mother and siblings help from time to time but she relies largely on her pride to take life one day at a time.

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The second face belongs to a woman in her 40s, timid and tentative. She tried to appear strong in front of her visitors but her sense of insecurity and unease was palpable. Her husband was retrenched recently and the family financial situation has been affected. She has not worked for many years. Her sister has been helping out but, determined not to rely on her for much longer, she wants to support her two daughters who are studying in the polytechnic and secondary school. She is looking for a job that is near her home and allows her to get back early in the evening to cook for her children.

The third and final one belongs to a woman in her 50s. She is single, staying with her mother. Being the unmarried child, she assumes the caregiver role for her elderly mother who needs regular medical care. Her mother is ageing and increasingly unwilling to get out of the house for fear of falling. She has to assume most of the household chores, cook for the two of them, and accompany her mother to her medical appointments which are getting more frequent and complex, with multiple specialists in multiple hospitals. Her face showed her fatigue and her worry. Her worry is not just one of short-term nature. Her worry is also for herself 20 years from now − who will look after her like she has done for her mother? With very little savings left for herself after her late father's medical expenses and her mother's expenses, she has very little left in her Medisave and her savings. Who will pay for her medical and retirement needs when she needs them most?

Sir, I welcome the Budget. This Budget focuses on the need for an inclusive growth that leaves no one behind. This Budget signifies the Government's seriousness in following through the Prime Minister's vision for a better home and an inclusive society for Singapore. This year's Budget will help the women that I have just described. Allow me to explain.

I am delighted that this Budget made specific mention about helping companies attract local workers and doing more to tap the latent pool of local manpower which is still available, including the homemakers. The Minister recognised that attracting these Singaporeans require a few changes. Jobs will have to be re-designed with the worker in mind. These jobs will also have to pay enough for the workers to join the company and stay with the company. In addition, companies will need to put in place more flexible working hours, shift system and work arrangements, including working from home.

This will be challenging to companies which do not now have the administrative capabilities to manage a more complex HR and payroll function. The Budget recognises these challenges. It has put forward SME Cash Grants and Productivity and Innovation Credit as schemes to help companies restructure. I hope that the schemes will be accessible to the SMEs and there will be help from the Government agencies to improve the HR capabilities across employers, across the entire system, including those in the people sector.

Single mothers will benefit from these changes in particular. Since they have to shoulder both work and family responsibilities on their own, many need a workplace that provides flexible work arrangements while bringing home a regular income.

For single working mothers with young children, their children will need affordable childcare service. Childcare support was enhanced in 2011 with the income ceiling raised from $1,800 to $3,500 per month. This Budget will provide further financial support for children from less well-off families. Baby Bonus, however, remained inaccessible to single mothers. As I was told by one single mother just last night, "Baby Bonus should be for the education and healthcare of the baby, and not to reward the parents for getting married". A child-centric policy will help to level the starting point for her child.

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Even as a more flexible working arrangement makes it more attractive for homemakers to return to work, their concerns will be the need for a conducive care environment for their children after school, and supporting their children's development needs outside school. The best way to allay these fears and help women return to work is to support the after-school care system and to provide more opportunities for affordable enrichment programmes. This Budget has proposed raising the income criteria for subsidies and financial assistance for pre-school centres, MOE schools and student care centres. While we encourage families to find employment to improve their family income, families sometimes find their financial assistance reduced as the mother returns to work. The move to raise qualifying household income criteria will cushion the impact and reduce the disincentive for the homemaker to return to work.

Our system should also continue to support social mobility. Some children require additional help with their school work; some would like to excel in areas where they have special talents, be it language, arts, sports, etc; and, in one case, an opportunity to participate in an overseas project. A resident of mine, young Mursyidah was selected to be part of her school's Community Outreach Programme in Sabah for her leadership qualities, demonstration of good values and effort towards environment conservation. The total cost of the trip was $750. MOE's Internationalisation Fund paid for $500, $200 could be withdrawn from Edusave account and the student would pay $50 in cash. In Mursyidah's case, the school tapped on the Opportunity Fund to pay for the trip, thus fulfilling the dream of this young girl.

We should give all children a fair chance to reach their goals. The top-up to the Edusave Endowment Fund, ComCare Endowment Fund and the disbursement to the self-help groups and the CCC ComCare Fund will provide the financial resources needed to enable the system, the parents, the community, the children, as a whole to support our children. Self-help group CDAC, for example, has been providing enrichment programmes in science, art and music for the children from low-income families. Single mothers and their children, in particular, will benefit from such community help.

( In Mandarin ): [Please refer to Pg 1405 for Vernacular Speeches.] As for women who are caring for the elderly, the Budget to enhance the healthcare sector and additional subsidy for the healthcare of the elderly is welcomed by many. The significant increase in subsidy for nursing homecare, home-based care and monthly grant for foreign domestic helper provide assurance and relief to many Singaporeans who have elderly parents. It provides much emotional and physical support to the care givers, many of whom are women.

For the older women, financial security is their biggest concern. The issue is that women tend to live longer, but have less savings for their retirement.

In general, Singapore women have a longer life expectancy than men. At age of 65 years, the retirement age, women can expect to live another 22 years to 87 years old, four more years longer than men. In Singapore today, among the more elderly aged 85 years and above, seven out of 10 are women.

More elderly women live alone, as more remained unmarried, divorced or out-lived their spouses. The number of widows in Singapore is more than five times that of widowers. Without the support of their spouses, the elderly women have to cope with their physical and financial needs on their own, especially those who do not have children to depend on.

Women have much lower average CPF balance. This is not surprising as women in the past tend to take up lower-paid jobs, had to leave their jobs to raise their families, or may be full-time homemakers since their marriage.

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I laud the Budget for setting out a comprehensive package to support the elderly. It will benefit especially elderly women who do not have a safety net to fall back on. The increased healthcare subsidies and top-up to their Medisave accounts may not completely remove their financial burden. But with the enhancement in our social policies, such as a top-up to Medifund, it provides them with some assurance that they will not be left in the lurch when illness strikes. The GST Voucher comprising cash, Medisave and U-save will give the older Singaporeans peace of mind, knowing that the help will be permanently there and they can be assured that the Government and the society will give them the necessary assistance.

( In English ): The young single mother would be pleased to know that she will get more financial support for the childcare arrangement of her child, more training opportunities and, therefore, better career options for herself. She will still have to cope with high rental as housing options remain limited for her. Baby Bonus continued to be inaccessible. The mother of two teenage girls will have a better chance of getting a job that meets her needs, more financial help in GST Voucher, and better financial and social support for her family, including better education and more opportunities for her children. The single older woman will be pleased with the additional options of home-based care and domestic foreign helper for her elderly mother so that she can continue working and build up her retirement savings. She will also get additional financial help in the form of Medisave Top-up and GST voucher for her mother and herself with the peace of mind that the help will be there for many years.

What is noteworthy is that while this Budget has introduced many changes – permanent GST Vouchers, per capita income criteria, subsidy for home-based care, and so on – some basic principles remained unchanged. This Budget put in place a more robust framework to redistribute income so that the lower income segments of the society benefit more. But it goes beyond redistribution. It is about helping people to help themselves, achieving self-reliance in the long run. Childcare for the single mom so that she can work and training opportunities for better paid jobs over time; improved employability and more flexible work arrangements for the middle-aged mother and opportunities for her teenage children to better their lives through education; support to care for her elderly mother so that the older single woman can remain gainfully employed with peace of mind. Give them a leg-up, so that they can get back on their feet and be self-reliant again.

Family support remained the other important tenet of our social policies. It would be better for the single mother to stay with her family and for the elderly women to continue to be cared for at home with her other children chipping in to support her. These basic tenets are important distinctions between Singapore and other developed countries – that we, as families, assume the primary responsibility of caring for ourselves; that we retain a strong work ethic and desire to be self-reliant. Women in Singapore believe in these principles. They take pride in themselves, want to live independent lives, and take good care of their family. They will be reassured knowing that the Government and the society will provide support if and when they are unable to cope with life's demands on their own. I believe this Budget will bring smiles to their faces. With this, I support the Budget.

4.49 pm

Mr Muhamad Faisal Bin Abdul Manap (Aljunied): Mr Speaker, Sir, thank you for giving me the opportunity to be part of this debate. Mr Speaker, Sir, I am glad that the Government is softening its stance on welfarism and is taking the right steps in strengthening our social safety nets. We may not be a welfare state in the Western sense of the term, but we should certainly be a state concerned with the welfare of the people, especially those left behind when Singapore was transformed into a global city in the past decade. I am also glad that the Government acknowledges that our social compact cannot be left exposed to market forces. In my speech today, I would like to raise three issues to help us push ourselves further in the right direction. The three issues are: one, empowering our social worker and other professionals in the social service sector; two, reaching out to the vulnerable; three, adopting a holistic approach to forging an inclusive society.

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First point: empowering our social workers and other professionals in social service sector. Sir, to help the vulnerable, we need to empower those who are actually holding up the social safety nets to catch them. Social workers and other helping professionals, such as counsellors, are in the frontline of forging the inclusive society and they have to be empowered to do it. We have long treated social workers like fire-fighters squelching bush fires and told them to thrive on the passion to serve. We need to change our model. Passion is good and well, but social workers need to be recognised as talents deserving fair compensation, social respect, and optimal workloads.

The starting salary of helping professionals, particularly social workers, is not sending the right message that social work is a vocation deserving of high social respect. This will undermine the Government's announced efforts to groom more social workers. According to the National Council of Social Services, the expected starting salary of social workers ranges from $2,550 to $2,750. In comparison, the starting salary range of a degree-holding teacher begins above the social worker starting salary range, at $2,770, and tops off at $3,250 for an Honours degree. This is almost 20% above an Honours degree-holding social worker's pay. Social workers are more like teachers in nature. Social workers help the vulnerable pick up valuable life skills and attitudes so that they can help realise their own potential human capital. Hence, the wages of both social workers and teachers should be comparable.

I recognise that the Government has been raising recommended social worker salaries and rolling out professionalisation measures in the past few years. However, we need to move faster and more decisively, just as the Government did when the teaching vocation came under threat in the late 1990s. We should make social worker compensation equivalent to teacher compensation.

There is also a structural issue here for the social services. Unlike the centralised education system, the social services are made up of a large voluntary sector. Social workers who work in the frontline voluntary welfare organisations do not enjoy the leverage of Government salary compensation, only recommended salaries. Faced with better pay and opportunities elsewhere, social workers have to make a painful decision to leave the frontline and more sadly their passions, for better jobs to serve their own family needs. I would like to propose that our Government consider funding a Connect Plan that teachers now enjoy to retain social workers. As the Ministry of Education puts it, "dedication should never go poorly rewarded".

It is good that the Government aims to reduce the caseloads of social workers from 50 to 40. This is not different from reducing class sizes for more effective teaching. We should aim to reduce caseloads further, not only by grooming more social workers, but also reviewing the workload of social workers. We need to reduce spurious administrative work so that social workers can focus on their main task of helping the vulnerable.

Point two: reaching out to the vulnerable. Sir, I am concerned with the high application rejection rate for our ComCare programmes, which the Ministry of Community Development, Youth and Sports kindly provided in answer to my Parliamentary Questions a couple of weeks ago. The rejection rate for the Work Support Programme has stayed above 40% in the last five years, while the ComCare Transitions Scheme has seen figures hovering around 30%. For the Work Support Programme, only about a third of the rejected applicants were ineligible because they had sufficient income or other resources. The rest were rejected for other reasons, including not giving sufficient information for assessment, could not be contacted, or not agreeing to the terms of assistance.

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The vulnerable are usually less educated, less confident and, therefore, more introverted than average Singaporeans. I have encountered constituents in need who have approached me during MPS are often worried about the application process and I have to write letters supporting them so that they can feel more confident in approaching ComCare officers. We need to make them feel safer about applying, less anxious that it would be a demeaning exercise, where a rejection could be devastating to their already low confidence. I propose that the Government considers reviewing the ComCare application process to make it more applicant-centric.

We are a face-saving Asian society after all and most of us would not admit to being needy and asking for help unless there is a real felt need. Perhaps, it may be better for CDC to err on the side of benevolence rather than on the side of caution in our effort to build an inclusive society. There is scope for improving on the rejection rate. We are glad to see that the rejection rate for the Public Assistance Scheme has dropped from about 40% from 2007-2009 to 18% in 2011. Let us try to do the same for the other ComCare schemes.

It is unfortunate that only 6% of CDC investigative officers are social work trained, as the officers have to make judgement-calls that require the aptitude of trained social workers. Officers should at least be trained and supervised by social workers to know how to evaluate the needs of the vulnerable with compassion. We should give applicants the benefit of the doubt when making the judgement on whether they are really in need.

Point three: holistic approach. Sir, we are glad that the Government now shares with us the desire to foster an inclusive and strong society. However, to achieve this, we cannot just seek to tackle the challenges at the symptomatic level. We must adopt a holistic approach. Families are the foundation of a nation. Strengthening of the social safety net is a reactive approach waiting to catch those who are falling, which no doubt is necessary. We need to reduce the falling in the first place. We should seek to eliminate vulnerability by building strong, cohesive families. Building a strong family should be a coordinated inter-Ministry effort to create family-centric housing and education policies and a working environment conducive to quality family life.

Our top-most concern should be work-life balance. A recent survey by Ernst and Young shows that the top motivation at the workplace for local employees is not compensation but work-life balance. The average hours worked per week has remained practically the same from 1990 to 2010, fluctuating between 46 and 47 hours. In South Korea, the OECD (Organization for Economic Cooperation and Development) country with the longest working hours, due to a concerted effort by the government to encourage more family time, the work hours have declined in a decade from over 48 hours a week to 42 hours a week in 2010. The average hours worked per week for all OECD countries was 34 hours in 2010. The National Family Council reported that 63% of fathers surveyed reported work responsibilities as the biggest challenge to spending more time with their kids. We are an anomaly among developed countries for working such long hours. The current productivity drive should take this into account and push for more productive shorter working hours rather than unproductive long hours.

Beyond work-life balance, we should be thinking harder about work-life integration. Work and family life do not necessarily have to be trade-offs pitted against each other. Improved internet communications technology and the growth of the knowledge and service economy means that flexible work arrangements are now more possible than ever. This is something that our current productivity drive can also look into encouraging.

For families with older children, we should encourage greater and deeper parental involvement in the social life of schools. Current parental involvement in education focuses on homework and so-called "enrichment" programmes that are really disguised assessment and tuition lessons. This is not healthy. We need to get parents involved in a deeper engagement with the social, cultural and broad-based educational life of the schools, rather than being narrowly focused on academic achievement. Already, almost all mainstream schools have a parent support group or parent-teacher association (PTA). But parents remain adjunct to the education process and are often seen as the trouble-shooting help for teachers. A PTA charter to further integrate parents and empower parents and teachers to work together for holistic childhood education and social development could be studied by both MCYS and MOE and implemented.

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Last but not least, we need to figure the elderly centrally in the fostering of strong families. The elderly are crucial social and cultural legacy levers, so they need to be supported to spend time with the younger generation, who need to inherit the intangible but invaluable social and cultural wealth from the elderly in order to maintain our society's moral compass. We must be careful that the silver housing policy does not diminish the transmission of social and cultural values. Already, the proportion of younger married couples who prefer to live with or near their parents has dropped from 73% in 2003 to 53% in 2008, in just five years. Given the recent spate of not-in-my-backyard protests against eldercare housing or facilities in HDB neighbourhoods, we need to do a mindset change in both Government policy and outreach to make the elderly seen as positive contributors to neighbourhood life rather than to be a social problem. A more consultative urban planning process is called for, so that the HDB or other Government agencies could encourage the goodwill of neighbourhood communities towards the elderly and facilitate the integration of the elderly in these communities. In conclusion, Sir, I believe that a more empowered social service sector, a more effective outreach to the vulnerable and a holistic approach towards more family-centric policies will be able to steer Singapore towards a more inclusive society and a stronger Singapore.

5.02 pm

Dr Chia Shi-Lu (Tanjong Pagar): Mr Speaker, Sir, I am grateful for being allowed to join this debate. Allow me to start by making a few comments about economy and I will move on to healthcare finance. It seems that most places one looks these days, governments are ringing the bells for austerity, believing that the asceticism this brings to their fiscal conduct will somehow save their beleaguered economies. Not unreasonably, many have questioned the wisdom of such an approach, pointing out that such unbridled belt tightening may have very huge social and economic costs.

Because this Government has acted prudently and decisively when it needed to, and because we as a people have remained resolute and united when it mattered, we are in the enviable position of not having to decide on what benefits to cut or which services to curtail, but rather on how best we can best increase these benefits and these services to our people. I cannot think of any better guiding aim than those stated as the premise for this year's Budget – to build an inclusive society, and a stronger Singapore.

[Mr Deputy Speaker (Mr Charles Chong) in the Chair]

There is austerity in this Budget, however, and I think we all know where the austerity lies. I had a lot of feedback about this and I am sure other Members also have the same. This is based on our future dependence on foreign workers. There will certainly be pain in this but this is tough love, and I fully support this Government's bold moves in addressing this unhealthy reliance. Just to take analogy from my own work as a doctor. I often warn my patients, healthy or otherwise, to avoid over-reliance on crutches and braces and other walking assistive devices when they do not need them. The initial period after they leave these aids behind is difficult but with the proper guidance, the patient recovers rapidly afterwards and grows from strength to strength. Contrast this to the patient who clings on to these crutches and this patient will surely, slowly deteriorate over time to the point at which any form of mobility becomes excruciating. And so we must act decisively to rehabilitate ourselves from this dependence on foreign labour, while our social and economic muscles are still healthy and able to.

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A few Members of this House have also mentioned that a large part of this adjustment will involve us Singaporeans accepting that goods and services may, in the future, become of less of cheap and good but more of fairly priced and good. I am sure that we as a country will not deny paying a fair wage to our fellow Singaporeans who are doing all the services that are necessary to us, whether it is looking after our sick, cooking our meals, bringing food to our tables or driving our buses.

There are many challenges that will face our economy over the next few years. As a developed economy, our economic expansion will slow to a more sedate pace. This will temper inflation and hopefully this will also temper income inequality. But it will also have the negative effects of reining in salaries, payroll and also Government's spending in the future. Even as we try to increase the salaries of those on the lower rungs of the income ladder, and try to encourage more women and the elderly to remain engaged and active in our workforce, the changing complexion of today's economy will make these efforts ever more challenging. Jobs are becoming more and more specialised, and employment parameters are becoming more fragmented and more fluid. There might be fewer opportunities for full-time employment as more jobs could become part-time or contract-based. This will surely impact on how we structure our lives and prepare for our old age.

In the classic old economy, which is based mainly on manufacturing or service, the market capitalisation of any given company correlated well with its size in terms of the number you could employ. But this may no longer be the case. If we look at a recent example, Facebook, which is poised to become one of the world's largest companies in terms of market capitalisation, but in terms of the employees that it can take in and the number of jobs it creates, it will be pretty small by Fortune 500 standards. So, in the new economy, we can expect that successful businesses in general may not create as many jobs as businesses of the old economy did, and headcounts are shrinking in the higher value segments. In fact, in many companies, a sure-fire way of raising the stock price is to trim the headcount. As payrolls shrink, employers will look increasingly for not just competent but exceptional employees, and this would be terrifying if they all shared Mark Zuckerberg's view, co-founder of the afore-mentioned Facebook, that such an exceptional employee would "not just be a little better than a good employee but it will be someone who is 100 times better". We have to be mindful of these changes as we prepare for the future.

It is not all doom and gloom and austerity for SMEs and I welcome, as many do, the beefed-up measures to support businesses, particularly SMEs, to achieve productivity growth. These are bold and substantive initiatives, and they must be followed through, if are to achieve our stated aims of achieving a 30% increase in needed incomes over the next 10 years. This initiative, I am sure, will help these businesses to cope better with business cost and labour concerns, amidst an increasingly competitive business environment. But what I also hope that this Government will continue to do is to monitor what extent gains in productivity are translated into real wage growth for the workers. One major dissatisfaction with capitalism nowadays is the perception that when companies do well, particularly when this has been achieved on the backs of improvements in worker productivity, these gains have not been more equitably distributed or shared amongst the employees. The assessment of businesses which have received Government grants, in particular, should continue to involve close scrutiny of how much their employees' salaries have risen in relation to how well the company has done, and should be an important criterion in approving further grants.

Thus, we must ensure that efficiency wages are really and, in fact, paid-out where they are due. There is another final cautionary note and that is to say that, in mature economies, despite all our emphasis on productivity, the relationship between productivity growth and wage growth becomes a little bit less linear, and it becomes a little bit less predictable. In today's new knowledge-based economy, the focus is shifting increasingly to innovation as a driver of growth. Innovation is what is increasingly carrying the premium, rather than pure productivity gains alone. It is certainly far more difficult to spur innovation rather than productivity. But this challenge can be met, as small countries like Israel, for instance, have shown to some degree, by earning itself the moniker of the "Start-Up Nation".

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As we seek to restructure our economy for the future, these are clear and present challenges that must be met. It is important that our Government persists with and expands measures to stimulate innovation and internationalisation, such as in the enhancement to the PIC Scheme, which many have already spoken about, and continues to invest and to support research and development in all sectors of our economy. We need to continue building on this Budget and further refine the clear and comprehensive roadmap that we have on how we want our economy to develop over the next 10 and 15 years.

Just a quick side note now on a topic which many have already touched on, and that is the defence of social mobility in our society. I think we all agree that, above all else, social mobility should be defended at all costs. Everyone should be able to feel that he or she should have an opportunity to improve his or her lot; the loss of this expectation is a cardinal sign of a society in despair and a nation in decline. We are doing a tremendous amount to ensure that all Singaporeans have access to education, housing, healthcare, employment, and this Budget continues this theme. But, certainly, we can and we all agree that we will do even more. We must fight against the perception that there are too many barriers at various stages of individual development, both in schools and in the workplace. We must fight against social stratification. It is a setback that the phenomenon of working from the mailroom to the boardroom is becoming less and less a phenomenon but I suppose that comes with maturing of the economy.

I welcome recent announcements and moves by the Ministry of Education to relook at the school admission process, particularly for primary schools, and also by the Faculty of Law which has said that it would review its admission process to encourage greater diversity while still adhering to the principles of meritocracy. Social mobility is well and good, and we do well to trumpet it but, finally, I would say that even though this is a good Budget and it has done a lot to support the vulnerable segments of our society, we may need to relook, sooner rather than later, at the most vulnerable segments of our population. By this, I mean those who are on the Public Assistance (PA) Scheme. Despite what we do, we will have a segment of the population who desperately needs help and, given that inflation and cost of living is going up, the amount of quantum given to this group of residents or citizens, who by definition are unable to work, should be reviewed.

I would like to end here by making two observations on healthcare and, in particular, the financing structures. And with your indulgence, Mr Speaker, Sir, I would like to continue this segment in Mandarin, to keep a promise to a resident.

( In Mandarin ): [Please refer to Pg 1406 for Vernacular Speeches.] The three Ms, namely Medisave, MediShield and Medifund are most useful for major illnesses and hospitalisation expenses. However, they do have their limitations when it comes to outpatient treatment. The Ministry of Health has, in recent months, unveiled sweeping and welcome changes in outpatient and intermediate and long-term care, healthcare financing, and the good news continues in this Budget.

However, treatment of chronic illnesses in specialist outpatient clinics remains relatively unsupported, and long-term follow-up by paediatric, cardiology and cancer specialists presents a significant financial burden to many patients. This problem, indeed, has become a very heavy burden to many families. I believe that the problem should be addressed by a two-prong approach. The first is to develop the primary care sector so that, as far as possible, chronic conditions may be managed by our GPs and polyclinics rather than by specialists, and this would also reduce the load at our hospitals. The second is to develop an insurance-based or managed care system for specialist outpatient care, and this may be an extension of existing insurance schemes.

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( In English ): Back to English, Sir. My final point pertains to a complex issue. Again, several hon Members have already brought this up. This pertains to the level and quality of healthcare that is extended to Singaporeans and, in particular, to our seniors, and this is a very pressing issue. If you visit us in Queenstown, you actually get an idea of how Singapore's population will look like in 2030, when about one in five of us will be above 65 years of age and the question here is not just about how long we live or whether we are free of illness, but also how well we live, and I wish to put on record here a comment and again another request from some of my residents that they wish me to put on record their thanks to the Deputy Prime Minister and his team and the Government to, and I quote, "to help the growing number of older Singaporeans live comfortably".

Medical progress can sometimes be breathtaking and the quality of healthcare does not always mean that it is correlated to how much we spend. The hon Member Mr Liang Eng Hwa and a few other Members have debated a bit on healthcare spending. We do welcome the announcement that healthcare spending will increase gradually over the years to $8 billion. This is a welcome move. But on the back of this, we as a country and a society will have to decide what level of healthcare and to what extent healthcare would be considered humane and acceptable to everyone in the population. We are not just talking about basic healthcare in our country, and when we are comparing affordability across different healthcare systems, it is very important for us not just to look at costs and coverage at base value but to really scrutinise the type of healthcare and the quality of the healthcare that is delivered.

When we talk about medical progress, there are many choices that have to be made. Let us say you have a pill that is able to treat hypertension and is as effective as another pill, but you only have to take this pill once a day or maybe even once a month, whereas the other pill you have to take four times a day. Now, the first pill, which is more convenient, costs four to five times that of the other pill. The question then remains who has to pay for this increase in cost. Is it up to society and the taxpayers, or should the patient himself have to pay?

Then there are other treatments. In my line of work, an elderly lady would come and see a doctor, let us say, with some arthritis in the knees and this lady wants to go dancing or she wants to go to the market by herself without using a walking stick. Twenty years ago, when I was a medical student, the correct answer would be to restrict her activities, make do with a walking stick and just stay at home and knit or watch the TV. Nowadays, that is still a viable proposition but our elders want to stay more active. Many of them may opt for a knee replacement which is, of course, a far more expensive proposition.

These are not life-threatening illnesses but they hark back to the root of what we feel is quality healthcare and the quality of the way in which we grow old. These are difficult questions that we have to answer and we have not even touched on end-of-life issues which are even more emotive and require a lot more deliberation on our part. But certainly, we, as a society, will have to over the years come to an agreement on what all of these things mean to us and how much value we place on all these things. We certainly have to consider all these in terms of their costs and benefits. And these deliberations should be tempered by a very, very large dose of humanity.

In conclusion, I believe this to be a Budget that builds on the strong foundations laid by previous Budgets and supports many of the issues raised during the Debate last year on the President's Address to this House. It is, indeed, as the Deputy Prime Minister has said, about "opportunity, improving ourselves, compassion". It is a pro-Singaporean and it is a pro-Singapore Budget. With this, I support the Budget.

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5.21 pm

Mr Gan Thiam Poh (Pasir Ris-Punggol): Mr Speaker, Sir, please allow me to thank you for allowing me to speak. Let me begin in Mandarin, as requested by my residents.

( In Mandarin ): [Please refer to Pg 1407-1408 for Vernacular Speeches.] The 2012 Budget is targeted and forward-looking, with measures focused on the objective of building a more inclusive, sustainable and harmonious society.

The Budget's assistance package is targeted at the elderly, those with disabilities and low-income families. This is in line with the egalitarian ideals prescribed in the Confucian Classic Book of Rites (" Li Ji "), whereby the elderly are provided for till their death, the able-bodied are gainfully employed, the young acquire skills, while widows, orphans, the childless and those who are disabled by disease are all taken care of.

I would first like to talk about how the Budget takes care of the elderly.

Many elderly residents applaud the move to raise the CPF contribution rates of older workers, and provision of a Special Employment Credit to encourage employers to employ older workers. These measures took care of older workers and, at the same time, encouraged employers to employ older workers. In addition, earned income tax relief for the elderly has also doubled. I hope that in the near future, the concept of a "retirement age" will eventually disappear from Singapore's labour market. Employers will then judge workers based on their ability and not their age. In this way, Singaporeans who wish to remain in their jobs can continue to work as long as they are able to. However, even then, the CPF Board should avoid extending the CPF withdrawal age further. After all, repeated changes may disrupt the retirement plans of CPF members.

The Silver Housing Bonus will provide an additional option for the elderly to monetise their HDB flats for retirement, as those who downgrade to 3-room or smaller flats will be given a bonus of up to $20,000. Our elderly can then have more money for retirement.

The Government will also implement a series of caring schemes to enhance affordability of healthcare. These include increasing the budget for healthcare in the next five years, from $4 billion annually to $8 billion; increasing hospital beds to 3,700 and doubling the capacity for long-term care; increasing healthcare subsidies; providing a monthly grant of $120 for families employing foreign domestic workers to take care of their elderly family members; providing households who install safety features at home for their elderly, with a grant of around $2,000; and waiving the GST for long-term care. With the adjustments in subsidies for long-term care, for families within the same income group, the subsidies for home-based care and community-based care will be higher than subsidies for nursing homes. These measures will help tremendously in encouraging families to allow their elderly family members to age in place.

One family that will benefit from the measures is the Ong family in my constituency. They live in a 4-room rental flat. Their 75-year-old father has dementia, while their mother of the same age is immobile. Both their sons are single and their income is not high, totaling to $2,500. The couple has a daughter who is staying home after having undergone a surgery recently. A domestic helper is helping her to take care of her elderly parents. Being able to receive the monthly grant of $120 to hire a foreign domestic worker will help them significantly.

A resident who wrote an email to me previously, requested that I suggest to the Government to waive the GST for long-term care. Before his mother passed away, the cost of long-term care and medical treatment for her was a huge expense, and a heavy financial burden on the family. The GST on long-term care is a double whammy. In future, this new measure will benefit many families. I hope that healthcare institutions providing long-term care will co-operate and not seize the opportunity to raise charges.

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Asian societies are all facing the challenge of an ageing population. China worries about "ageing before becoming rich", the Hong Kong population is also ageing. In Singapore, the social structure is also ageing. This year's Budget is focused on taking better care of our elderly, so that they can age gracefully in their retirement years. As mentioned above, the Government measures have taken into consideration the various needs of the elderly, and have provided companies and families with more subsidies. Whether it is with regard to allowing the elderly to continue working, or receiving home-based care, the purpose is to allow the elderly to stay in-touch with society, to age with grace and dignity.

( In English ): Sir, the various measures for the elderly, disabled and the poor have introduced more assurance to those groups of Singaporeans that they will not be left behind. Many of my residents from the lower and the middle income groups told me that what they desire most in the midst of all the rapid changes taking place around them is certainty. They crave most for certainty of property prices and medical costs.

For most Singaporeans, a HDB flat will be their only property asset and home. To see the rate at which HDB flat prices are rising strikes panic into the hearts of many young and upgrading families. Certainly, the cooling measures in recent months by the Ministry of National Development have helped to ease their anxiety. However, many voiced concerns that they may not be able to keep up with the mortgage payments should one or more breadwinners lose their jobs in the uncertain globalised market. Currently, the BTO prices are set at about five years of newlywed first timers' annual income. This is not an unreasonable price range but I would like to appeal for the Government to consider building more affordable basic flats and 2-room and 3-room flats with shorter leases, such as 30 years and 60 years, to offer more options for singles and smaller families from lower income and even middle income groups. Such options will enable them to better manage and control costs for themselves. Having more basic flats without the bells and whistles would encourage more Singaporeans to spend within their means and set aside more cash and CPF savings for their retirement instead having a higher portion of it locked into their property.

I find the current trend among the younger couples to buy the biggest flat beyond what they can afford worrying. It is far better to buy one well within their means and upgrade when they have more savings later. Even with our economy so healthy and at almost full employment, 2,090 residents were retrenched in the second and third quarters of 2011. Of these, 1,290 were PMETs.

Besides, building more small flats, especially in mature estates, will enable the elderly to live near their children and promote family bonding. There is a small group of low-income Singaporeans who do not have any property asset at all. They are either still waiting for HDB rental flats or are renting from the open market as they have missed the qualifying criteria. They are struggling with the higher rentals and I hope the Government would look into measures to assist them. Generally, the higher cost of living – higher utility bills, as a result of oil price rises, transport costs and food costs – is pushing them into financial hardship and debts. It is more and more of a struggle for them to make ends meet.

It is not the residents who want better control over rising property prices, many business owners are also in difficulty with rising property rentals. In view of the many additional costs that our SMEs have to bear, due to the recent policy changes for foreign workers, would the Government consider stabilising the rentals of commercial and industrial properties through JTC and HDB? In my view, JTC and HDB should be playing this primary role in maintaining affordable rental in these properties so as to support and nurture our SMEs.

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Another area where unexpected expenditure can cause hardship to a family is medical cost. It does not take a major illness to cause hardship. A few illnesses in the family may easily knock a family's budgeting off course. In addition, not all are covered by insurance, including MediShield, and even those who are or may have particular diseases and afflictions which are not covered by the policy they have signed up for. Presently, we have managed medical costs through our polyclinics and Government hospitals. However, many residents tell me that queues and the wait can be long. Although the implementation of the Community Health Assist Scheme will help to alleviate the situation, I hope the Ministry will consider taking further action to increase the recruitment and retention of medical professionals and personnel in the public sector.

Last but not least, I would like to speak on jobs for Singaporeans. SMEs understand that we have to reduce our dependency on foreign workers. They understand that they have to increase productivity. In fact, foreign workers from Malaysia and China are beginning to choose to not come to Singapore as they have opportunities in their home countries. However, many companies are still at a loss as to where they should get help to recruit local workers and to increase productivity. The other area to improve upon is the execution and the delivery of the many schemes to help SMEs. They know that there are many schemes available but find it confusing to navigate and apply for. We should standardise and simplify the process to assist them.

On one hand, it is a happy problem – full employment, lots of job orders but shortage of workers. On this situation, new business opportunities arise, for example, they are centralising dishwashing services. For coffee shops and hotels who cannot find workers to wash their utensils and crockery, they now have a solution. When bigger companies cannot find the labour to execute their projects, they outsource to smaller companies. We benefit from the new business opportunities. On the other hand, they can really do with some help with recruitment. Would the Government consider setting up a centralised agency to help companies with labour shortage to match-make with those local workers? Yes, there is a job directory on WDA's website which listed both public and private sector job portals. However, this is only accessible to the educated and computer-savvy. Many workers do not have the ability or skill to take advantage of and utilise this facility. It would be desirable if we have a bricks-and-mortar department with staff to assist Singaporean workers match up with the local companies with labour shortage. Such an arrangement would be particularly beneficial for workers in lowest wage groups, including cleaners.

I was appalled to find out from a Straits Times report on Sunday that only 27 public sector agencies make accreditation a criterion when they select cleaning companies. Considering that we have 14 Ministries, 65 Statutory Boards and nine Organs of State, the public sector has the potential to make a real impact to bring up the cleaning sector and set higher standards for productivity – standards of delivery and treatment of workers. I strongly urge the Government to take a resolute step to make accreditation mandatory – only cleaning companies which have accreditation are to be used. The Government must look into and monitor the work conditions and treatment of the workers very closely. Even better, all cleaning workers should be unionised. I suppose the union would like it.

It is highly regrettable that, in recent years, due to outsourcing, the same cleaner is subject to lower and lower wages and benefits and contract progress due to stiff competition among cleaning companies. In the past, cleaners in the public sector were considered part of the Government service and enjoyed the accompanying employment benefits. This illustrates that outsourcing is not quite the panacea to higher specialisation and efficiency. In addition, there are externalities, the side effects from outsourcing which are not borne by the supplier nor the consumer. They are borne by the very worker who delivered the service. Every dollar saved is at their expense, the weakest and the most vulnerable member of our society, trapped in the vicious cycle of poverty. That is not right. It is time for us to make the necessary changes to restore the balance, ensure fair treatment and decent pay for decent work. With that, I support the Budget.

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Mr Deputy Speaker: Order. Hon Members should select the silent mode in their cell phones. Thank you. Assoc Prof Dr Muhammad Faishal Ibrahim.

5.37 pm

Assoc Prof Dr Muhammad Faishal Ibrahim (Nee Soon): Mr Deputy Speaker, thank you for allowing me to speak during this debate. Essentially, I feel that Budget 2012 is a continuation of our national psyche of instilling attributes of inclusiveness, hard work, resilience, skills upgrading and saving for the long run as part of the Singapore spirit that will bring our nation's ability to adapt and respond to future challenges and opportunities. Much has been debated about the Budget by other Members of the House. Kindly allow me to add my perspective to this debate. Firstly, in Malay.

( In Malay ): [Please refer to Pg 1409-1410 for Vernacular Speeches.] Sir, since becoming a Member of Parliament, I have seen how our Government have put forward a series of progressive and inclusive Budgets catering to the various segments of Singaporeans.

Therefore, I am puzzled by the statements of Members of the Workers' Party like the hon Mr Chen Show Mao and Mr Faisal Manap, who questioned this issue of inclusiveness. Coincidentally, I have made a detailed study on this issue while preparing this speech. If we study the previous Budgets closely, we will discover that there are many elements of inclusiveness in them. And if we google the words "inclusive" and "Singapore Government", we will find many results, that is, around 30 million results. So the answer is clear and obvious.

These Budgets have been forward-looking, with the sole intent of laying the groundwork for Singaporeans to compete, meet the challenges and reap the opportunities of the ever-changing and evolving economic landscape. The Budgets, through the years, have been instrumental in improving the overall competitiveness and resilience of the people. This ensures that no Singaporean is left behind.

Sir, this inclusiveness ensures that all Singaporeans, regardless of race and religion, young and old, and all backgrounds, benefit from the Budget. With the Government attuned to the different segments that have different needs, I am glad that this year's Budget, like the ones in the past, will open up more room for us to receive benefits from the various schemes for people from all backgrounds, including our Malay community.

I am grateful that this Budget's mission includes those who are still in school, looking for jobs or upgrading themselves, and the elderly to continue working. It is based on the concept of taking a positive view so that the quality of life of Singaporeans and their families is comfortable.

What is more important, it provides the opportunities for the Malays to realise their desires and dreams to improve themselves to a higher level so that they have a better future. The schemes presented in this Budget, especially the Special Employment Credit scheme, together with the Elderly & Disability Grants, support older and disabled Singaporeans. Apart from providing opportunities for this segment of the population, this Budget provides a long term commitment as well as builds an inclusive society.

The Special Employment Credit scheme application over the next five years, in particular, will encourage companies to manage costs and engage older Singaporean workers. For these workers, it will provide them an opportunity to build their retirement nest and stay employed. These initiatives, together with other measures like the available training programmes, will provide more opportunities for Singaporeans to work and rise up in their career.

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I would like to urge our community to work hard and excel in whatever jobs they are doing. Our different backgrounds and jobs should not hinder us, as long as we stay positive and be passionate in doing our job, we will do well.

In terms of education, despite the successes of Malay students and increasing efforts of the community to ensure every child receives quality education, this Budget would further ensure that students would not be left out, due to the various opportunities created by our schools through the many enrichment and development programmes available.

Measures, such as the pre-school subsidy, review of the MOE Financial Assistance Schemes and top-ups to the Edusave Endowment Fund, will broaden the opportunities for every child to pursue his or her interests and strengths to scale the many peaks of excellence that our education system provides. Hence, I urge that we make use of these schemes and work hard for our children's education.

I remember my father used to tell me that I should focus on my studies and leave the financial matters to him. Instead, he will work hard to finance the education of my siblings. Apart from applying for bursaries, my father and mother would take on two to three jobs in a day, to ensure that we are able to spend more time and focus fully on our studies so that we are more effective and successful in our chosen fields.

I have often stressed to my constituents, that when parents put employability and education at the forefront of their family plans, they are putting themselves on the road to success and can become self-reliant.

Mr Speaker, the Malay community would continue to develop and grow if it embraces the opportunities and potential benefits this Budget provides. It is evident that this Budget provides a timely opportunity that would enable the community to move up the social ladder.

The Malay community should take this opportunity to upgrade themselves and develop the attributes which I mentioned earlier, that is, skills upgrading, education and being employable well beyond their working years and contribute both socially and emotionally towards the community's development. If more of us continue to improve ourselves, we will continue to grow as part of the Singapore society. This would, in turn, ensure that we have what it takes to build a better life for ourselves and our families. Sir, allow me to continue my speech in English.

( In English ): Sir, first, I would give an example of a company called Camel Nuts. This is an example of how they have increased productivity through innovation, technology and mindset development. Sir, I have received feedback that the Government should do more to help the SMEs to increase their productivity as many companies felt that the tightening of foreign worker quotas would open up more difficulties for businesses at a time of global economic uncertainty. With careful planning, dynamic companies would be well-placed to ride the wave of productivity. Otherwise, they may find themselves gradually being left behind in a re-structured economy of higher-value and more innovative players. Ignoring productivity enhancements would be to our own peril. I would like to share with the House on how a local company, Seng Hua Hng Foodstuff Pte Ltd, famously known as Camel Nuts, has adapted as an SME to meet the challenges of the New Economy.

Camel Nuts is a 38-year-old Singaporean company which has used SPRING Singapore's Integrated Management of Productivity Activities (IMPACT) assessment tool to identify areas for improvement and productivity gains and has since adopted the Lean Six Sigma into its factory layout and processes to successfully improve productivity. In addition, the company has also leveraged on grants from SPRING Singapore to invest in machines and equipment to progressively automate their processes and reduce their reliance on foreign workers and cater for long-term growth planning.

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However, its Managing Director, Mr Poh Ah Seng, is aware that state-of-the-art technology and methodologies alone are not sufficient to achieve productivity gains. In his attempt to upgrade the company, he asked all his managers to read a book entitled "The Goal: A Process of Ongoing Improvement"' by Eliyahu M Goldratt to develop their mindset and introduced them to the Theory of Constraints – I have the book here – and the commonsense approach in finding productivity gains in the workplace. In his own words, Mr Poh said, "Just by using a commonsense approach and overcoming the constraint in our mind that things cannot be improved, we are able to increase productivity and do more with less."

Sir, the journey of Camel Nuts, a well-known Singapore brand, is an example of how an SME embraces the new business landscape and provides employability for its workers by upgrading themselves and changing their mindsets to increase productivity. It remains committed to its workers through innovation and R&D. It hires the elderly, the disabled and manages and provides opportunities to the low-income to upgrade their skills, stay relevant and committed to the company's values and purpose. I feel that the approach taken by Camel Nuts and the principles discussed in Mr Goldratt's book have been and can be aptly applied to Singapore and our businesses, always making improvements despite our constraints. This will ensure that we continuously improve and grow as an individual, family, organisation and as a nation.

Sir, I am pleased that we are anticipating the impending "silver tsunami" impact of our ageing society. Many appropriate measures have been introduced in this year's Budget. I feel that the Government could also propose incentives for the elderly who lead active lifestyles through the creation of a reward scheme for them to attend health talks and screenings, participate in health-related events where they can accumulate points to redeem for vouchers or cash benefits. This would motivate the elderly to earn investments to their health. Although there are localised reward schemes to promote certain programmes, such as the Northwest CDC Brisk Walk Club, I feel that a more broad-based reward scheme that promotes healthy lifestyle activities can be implemented to further enhance our health promotion efforts. The Government should also consider measures to support and incentivise innovation in providing health support services using technology. Recently, The Straits Times reported about telemedicine. We should also encourage initiatives in the medical sector to support the elderly living at home in e-ordering medicines, e-visiting GPs, managing dietary needs and personal health.

Sir, before I end my speech, as mentioned in my speech in Malay, I am puzzled by what was said by the hon. Members of the Workers' Party, Mr Chen Show Mao and Mr Faisal Manap, calling for inclusiveness. Sir, I happened to be doing some research when I was writing this speech about the issue of inclusiveness. I looked through all the past Budget debates and I happened to find the efforts and policies relating to inclusiveness. I found the level of depth given by the Government in ensuring that no one is left behind. After hearing the speeches, I went to Google the words "inclusive" and "Singapore Government", and I got about more than 13 million results coming from it.

Sir, in conclusion, this Budget resembles the Singapore Way of being a forward-looking Government that continues to demonstrate its ability to deliver good governance so that its people can realise their aspirations and goals. It reflects our values and approach of managing challenges and opportunities, that we take no short cuts, no populist moves but it is all about taking a longer perspective with Singaporeans being at the heart of it all. Sir, on that note, I support the Budget.

5.53 pm

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Mr Yee Jenn Jong (Non-Constituency Member): Mr Deputy Speaker, Sir, I welcome the noticeable shift from previous Budgets, which concentrated mostly on economic growth, towards more social programmes in this Budget. Over the last decade, our society faced many challenges, such as widening income inequality, rising inflation and slower social mobility. Wages of low and lower middle income earners have stagnated or grew much slower than that of our highest income earners. Our over reliance on market-driven policies has resulted in deficiencies in the provision of social goods.

Refocusing on the weak, disabled and elderly amongst us is timely. The Government has to step up to mitigate the adverse effects of the widening income inequality by proactively providing essential social goods and services. This Budget is a first step. Moving forward, we need to tread between growth and equity; between individual's and society's responsibility. How far will we go in our journey to be inclusive? How much do we provide for in elderly care and medical costs? What is affordable public housing? What levels of social security are we comfortable with? These questions must be debated upon as our nation defines a new socio-economic model going forward.

Next, I would like to touch on Small and Medium Enterprises, a subject that is close to my heart as I operate in this space. There are a number of assistance schemes in this Budget for SMEs. We have not been short of schemes for SMEs in the past, especially in the form of grants. While these can provide some slight help, given the challenging environment SMEs operate in, they are like aspirins for short-term pain relief. We need to look deeper beyond assistances and tackle directly the important issues confronting SMEs.

In preparing for this section on SMEs, I recall a hike I made into the primary rainforest of Sarawak some years ago. Walking into the rainforest on a hot day, I noticed dim lighting and a distinct lack of undergrowth. With sunlight blocked by the canopy of the giant trees, smaller plants could not flourish. SMEs operate in challenging environments. Industrial rent increased at more than three times inflation rate at 16% last year. This increase is the highest level in the past 14 years. Retail rent rates have risen steadily too. Industrial and retail spaces are now dominated by REITS. I join Members Inderjit Singh and Mr Teo Siong Seng to echo my concerns about the effects of a decade of the proliferation of REITS on rent. Could retail rent increases be partly driven by Retail REITS enhancing their negotiation position given common market practice that they can obtain the retailer's gross retail turnover data? I urge serious review on the effects of REITS on SMEs.

Going forward, SMEs will find it harder and more costly to hire suitable manpower. In certain industries, there will be continued competition from the big boys. The Budget provides for assistance in mergers and acquisitions (M&As). Some SMEs may be forced to close or merge. SMEs form 99% of our business entities and employ some 63% of our workforce. Jobs will be at risk as a result of closures and mergers. We need to brace ourselves for a rough ride in the SME space in the next five years as the economy restructures. We need to be prepared to help those whose jobs will be lost during this period of restructuring.

We dream of the next big thing to fly the Singapore enterprise flag globally. How do we achieve that? Going back to the rainforest analogy, how do we get smaller plants to grow? They need air, water, good soil and sunlight. The seeds themselves must also be of good quality. Companies need a positive business climate, which can be promoted by good Government policies, just as plants need air and water for sustainability. We do have fairly positive policies that allow companies to get started quickly and favourable tax structures. We need to constantly look ahead to ensure our environment stays small-business-friendly.

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The marketplace is the soil the plants grow in. We may not have a large domestic market, but we do have a domestic market that can support our SMEs. It would help if the Government can make the soil richer by stimulating domestic consumption from time to time as necessary. The seed represents the soundness of each company's business ideas as well as the talents it has. Good programmes to cultivate our young to be more innovative and entrepreneurial can help seed improvements for our future SMEs.

SMEs need space to grow, just as plants need space for sunlight to come through in the rainforest. I noticed that in the rainforest, where there were patches that the giant trees were absent for whatever reasons, there were thriving smaller plants. The space vacated by the giants had allowed smaller plants to flourish. I had spoken previously on this. I will agree to disagree with some Members of this House as to whether there is crowding out by large trees, the industry giants. Beyond arguing about crowding out by large companies, I would like our Government to create fresh spaces for SMEs to grow. It can do so by being a significant player in the economy to drive the creation of innovative SME-led solutions in certain key sectors.

For example, the Government's call for consumer and first-user of innovative solutions to be developed by local enterprises in the 2010 ESC report, backed by a $450 million co-innovation fund, is a step in the right direction. We can do more.

There is danger that there may be risk aversion by Government officers to buy solutions from SMEs for fear of having to answer for failures, even if SMEs can meet the specifications and offer lower prices than larger companies. We need to prevent this mindset. One possibility is to have smaller tenders that only SMEs can participate in. If there are no SMEs who can fulfil the requirements, then the tenders can be opened to the larger industry players.

We can identify certain areas where there is substantial Government demand and a strategic reason for us to have our home-grown innovative solutions. A positive example that comes to my mind is in water technology. We could have imported all the technologies we require but it was good that we also chose to go with some local players to allow them to grow and compete in similar projects internationally. We need more of such successes.

We have many public building projects ongoing now. We can use this opportunity to aggressively push the development of innovative home-grown green technology to be incorporated into the buildings. We could also use it to push for productivity improvements in our construction industry by insisting on productivity conditions and rewarding for innovation in productivity enhancements.

I also like to see policies requiring the public sector to favour green procurements. This can favour the development of our local suppliers to meet green standards that will allow them to compete for projects in countries that have already implemented such policies. Green procurement policies are currently gaining traction in places such as Taiwan, Thailand, Canada, Japan and Korea. We can even dovetail this initiative with that of the Renovation and Refurbishment Deduction Scheme by having better tax deductions for retail and food and beverage (F&B) outlets that adopt renovations that are eco-friendly.

I was encouraged recently to learn that a local SME, Greenpac (S) Pte Ltd, had developed an environmentally-friendly packaging solution for a global eye-care leader, CIBA Vision, that has won the international WorldStar Packaging 2010 Award. I learnt that not only was the solution eco-friendly, it also saved space, resulting in lower transportation costs and eliminated unnecessary unpacking and re-packing, which resulted in productivity gains for the client.

There was a call to use green lenses in Government procurement in the 2010 ESC report. I like to see greater speed in legislation and execution of this, and to use it to cultivate local SME expertise in this area. We can certainly develop more local SMEs to become world leaders in the promising green technology industry.

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Sir, I have confidence in the innovativeness of our SMEs to rise to the challenges when spaces are open up for them to demonstrate innovative solutions to meet our public projects' needs.

I like to end with a story. I took a walk outside this House recently and noted the inscription on the statue of Sir Stamford Raffles by the Singapore River, which is just down this direction [ indicating ]. It says on the inscription, "On this historic site, Sir Thomas Stamford Raffles first landed in Singapore on 28th January 1819 and with genius and perception changed the destiny of Singapore from an obscure fishing village to a great seaport and modern metropolis."

Singapore has moved into a new phase of our development. The world has moved into a new century. There is a great need in this 21st century to have our people to be ingenious and perceptive to spot gems of opportunities caused by constant upheavals. There will be plenty of this, caused by constant technological changes, political changes and shifts in economic power. We live in an exciting world. Mark Zuckerberg, founder of Facebook, became the world's youngest self-made billionaire at just 23 years old, four years after starting his business in the dormitory of his university. Such opportunity and speed are only possible today with constant technological changes that have broken down old barriers and level the playing field for innovative newcomers. In this innovation-driven era, we need to empower our people through mindset change to achieve quantum leaps in productivity improvements.

Sir, we need people full of creativity, innovativeness, perception and daring to find the next Angry Bird and Facebook in us. Sir Stamford Raffles took risk with Singapore, a small and undeveloped fishing village. In this age and time, we need to find in ourselves the genius, perception and risk-taking spirit to discover brave new worlds out there.

I conclude by saying that significant changes lie ahead as our economy restructures. Our forefathers had worked diligently to get us to where we are. We need to brace ourselves for the changes to come, and find faith in our abilities to rise above these challenges, as we had done so in the past.

6.07 pm

Mr Seng Han Thong (Ang Mo Kio): ( In Mandarin ): [Please refer to Pg 1411-1412 for Vernacular Speeches.] Mr Deputy Speaker, Sir, I would like to tell a story about a compassionate and inclusive society. This story took place 21 years ago, right here in Singapore.

Mr Deputy Speaker, Sir, last Sunday, I attended the 21st birthday party of a girl with scaly skin – Huang Baoping. Her father said, "We couldn't believe that she could celebrate her 21st birthday because when she was born, the doctor said she may only live for two weeks, perhaps at the most two months, and later the prognosis became 10 years."

Mr Deputy Speaker, Sir, Baoping is now 21 years old. With the care and support from the society and her family, she found a job. Her mother said, "We couldn't believe that she can work."

This is indeed an inclusive society.

When Baoping was born 21 years ago, her skin peeled daily and looked like fish scales, thus she was called the girl with scaly skin. She had to take medicines and injections everyday, with monthly medical expenses that can go up to thousands of dollars. She also had arthritis. When her story appeared in Shin Min Daily then, the public donated generously to her and, upon receiving sufficient donations, her parents said they had enough and even donated the extra funds to the Chinese Development Assistance Council. The couple decided to bring up Baoping against all odds and had never complained about their plight.

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This is the photograph of Baoping when she was eight months old and during that time, as there was medical subsidy, she received special treatment in the hospital and could afford the medical expenses. As she grew up gradually, we can see her skin peeled and shed daily. Under such circumstances, she grew older and was eventually able to attend PCF Kindergarten like any normal child.

This is the photograph of Baoping in the PCF Kindergaten. Later, like everyone else, she went to Primary school and Secondary school. But she suffers pain whenever she walks due to her arthritis, thus everyday her father would send her to the bus stop on a bicycle, then she takes a bus to school, and, after school, her mother would fetch her from the bus stop on a bicycle. After secondary school, she attended ITE Simei and learnt a skill. Now, she can work from home on a computer. But she has to face the realities of life. Her struggles are lifelong.

Mr Deputy Speaker, Sir, Baoping comes from a low-income family. And over the last 20 over years, because of our inclusive society, she received much help on her medical treatments and also benefited from the MOE Financial Assistance Scheme so that she need not worry about expenses, such as textbooks, school fees and uniforms. And now, she finally enters a new phase in life. She is a working adult. Thus, it is commendable that the Finance Minister, in presenting the Budget this year, has increased the income ceiling for MOE Financial Assistance Scheme to allow 80,000 families, up from 40,000, to benefit from the Scheme.

At the end of the Budget Statement, Finance Minister Tharman Shanmugaratnam played a motivational video about how Singaporeans strive for the best. The video featured several Singaporeans, some from low-income families, some are older workers, and others have disabled family members. But these people were full of confidence and were motivated to work hard and do good. Meanwhile, they benefited from the Government's various assistance schemes for the poor and needy. Amongst them, the most touching story was Madam Wu Qiaozhen. When she finally witnessed her husband stand up on his feet after receiving physiotherapy, she said, "I often told my daughter, there is compassion in this society."

Yes, we are a compassionate society. This inclusive society will eventually help those who are crippled to stand on their feet, allow older workers to regain confidence and dignity, and allow low-income earners to have job prospect. And it is in this prospect can we build a stronger and more inclusive society.

Mr Deputy Speaker, Sir, two days ago, I attended a dialogue on the Budget. Unlike previous years, people no longer talk about who gets a bigger red packet, but rather they want to understand from various aspects how the Government will help these three groups of Singaporeans – the low-income families, older Singaporeans and families with disabled members. They supported the Budget but they also had some questions. Why do we need to provide $1.1 billion for public transport operators to buy new buses? How does the Government ensure that bus services would improve and fares would not increase? And I, too, would like to ask the Finance Minister whether the Government would ensure that the bus companies would increase drivers' wages, otherwise how are they going to employ another 1,000 bus drivers? If we cannot find more Singaporeans to become bus drivers, we would have to employ over 1,000 foreign drivers. Of course, we need some foreign drivers in the team, but we need to ensure that Singaporean drivers can have higher wages.

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Older workers are also grateful to the Government for increasing their CPF contribution rate, so that they will have higher savings. As for the self-employed, such as taxi drivers, they would like to thank the Finance Minister for increasing their training subsidy.

I would like to raise a point – some Singaporeans, particularly the Budget's targeted beneficiaries, are unclear or even ignorant about how the new policies will benefit them. We should think hard and come up with practical ways of communicating the message to them. For example, the Primary Care Partnership Scheme implemented last year is a good policy. But many people did not know about this scheme, neither did they apply for it or enjoy its benefits. The scheme is now renamed "Community Health Assistance Scheme".

Two days ago, Prime Minister Lee mentioned this scheme during a dialogue in our constituency and found out that not many people knew about this scheme and its details. As a Chinese saying goes, "good news are often kept within the walls but bad news spreads quickly and widely". So, I hope the Government would be able to spread the good news far and about and be bold in sharing the bad news directly. The Government can be wordy and detailed in their internal documents, but for the key messages to the people, particularly the benefits for the low-income earners, older Singaporeans and the disabled, they should be "short and sweet and easy to understand".

So, I ask the Finance Minister, will the Government be "short and sweet" in communicating the new Budget Statement to Singaporeans, particularly the low-income earners, older Singaporeans and the disabled, so that they can easily understand it? Mr Deputy Speaker, Sir, most Singaporeans support this Budget but they hope everyone would know more about it and understand it readily. I support this motion.

6.15 pm

Mr Zaqy Mohamad (Chua Chu Kang): Mr Deputy Speaker, Sir, allow me to start my speech in Malay. ( In Malay ): [Please refer to Pg 1413 for Vernacular Speeches.] The 2012 Budget is a balanced one that meets the current needs and long-term challenges. I hope that the allocated amount this time will bring benefits to the elderly as well as those in the low-income group.

I also hope that, through the long-term plans of this 2012 Budget, we can generate more job opportunities and better pay, especially for low-wage workers, housewives who wish to enter the labour market and older citizens who are still active.

Therefore, I would like to urge the Malay community to take advantage of every available opportunity and programme, and work towards improving and upgrading themselves with the various opportunities that are available.

This year, we see more of our Malay/Muslim students entering the the Mendaki Tuition Scheme (MTS), until for the first time ever, there is a long waiting list. This is a positive sign that more parents want to see their children succeed because they realise that education is the main key to a successful life.

The Government has done much to increase the allocation for education. However, I would like to suggest that more support be given to the low-income group to help their children improve their lives. This enhanced assistance can be made in the form of a cash grant for certain bodies like MENDAKI, to fund programmes like the MTS that can make an impact towards our community's progress.

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MENDAKI, as well as other Malay/Muslim bodies, play an important role in improving the community's social standing, by providing opportunities to children from the less fortunate families, for them to attend tuition and enrichment classes.

Here, I hope that the Government can further ease the way for the Malay/Muslim community in Singapore to continue progressing and achieve a good standard of living.

( In English ): Mr Deputy Speaker, Sir, I would first like to thank the Deputy Prime Minister and Finance Minister, Mr Tharman Shanmugaratnam, for an enlightened Budget Speech delivered on 17 February 2012. I am pleased that with this Budget, which provides a number of benefits for the elderly as well as the middle and lower income groups, will help many Singaporeans. It is only right and fair for the Government to remain prudent in using taxpayer dollars – in kind and social benefits – so as to deliver the desired social compact for citizens. Representing my constituents in the Chua Chu Kang GRC, I am glad to be given this opportunity to give my perspectives on Budget 2012.

Overall, I think that the Budget 2012 is a balanced Budget – aiming to address some of the basic needs of the day, for example, rising costs of inflation, the increasing needs of the elderly as well as for the long-term interests of our country. By doing so, we can give our people that sense of security that the Government cares for our longer term well-being and cultivates a balanced society – and not just one that is focused on GDP growth. Many are therefore heartened that there has been some re-think of our policies to allow for more active intervention to alleviate the stresses of those in the lower rungs of society.

There are three areas of the Budget that I would like to cover today: (i) the rise of the dual economy: bridging the income disparity and concerns with the "one-size-fits-all" productivity drive; (ii) the welfare of elderly: "lifestyle security" for the elderly; and (iii) the new social compact: compassion versus competitiveness.

Firstly, we have to recognise that the old economic thinking that GDP growth translates to citizen's wealth does not apply today. For example, in the USA, two-thirds of the nation's total income gains from 2002 to 2007 flowed to the top 1% of US households, and that top 1% held a larger share of income in 2007 than at any time since 1928, according to the Centre on Budget and Priority Policies' Report dated 9 September 2009. USA today has a Gini coefficient of 0.45. In Singapore, we are facing this issue. Our Gini coefficient has risen from 0.442 in 2000 to 0.472 in 2010, according to the report, Department of Statistics 2010.

At the lower income end, wages of the lowest 10% of the income scale have remained stagnant for the past decade. Some have even experienced earning declines, as reported in The Straits Times on 7 February 2012, that in 2000, the median gross wage for cleaners and labourers was at $1,277. By 2010, it fell to $960. On the other hand, the number of individuals who earn at least $10,000 a month in Singapore has jumped from 48,400 to nearly 140,000 in a decade. Singapore today has the highest proportion of millionaires – one in six households. Some have highlighted that Singapore, as a small economy, is more susceptible to global trends and influences and, hence, the more pronounced rising inequality. But what can we do to manage this inequality better? While we can add more to smoothen out the path for greater mobility, as Deputy Prime Minister Tharman rightly pointed out, it will get more difficult to keep up this mobility in the years to come. There is therefore a need to provide more direct help for the average person to tackle the issue of cost of living. We need to ensure that there is space for lower-skilled or retired Singaporeans to make a living and enjoy the fruits of the nation's wealth. It must be remembered that no one can reach the high levels of productivity to cope with high costs of living and doing business here.

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Looking at our Budget of the future, I fear that our economic model seems to be heading one way – the way of higher productivity and higher costs of living. I think that we may have a policy clash – while the Government pushes for more productive, highly skilled economy, Singaporeans are caught in a tension because a dual economy seems to have evolved in Singapore. On one hand, we have structural changes brought about by globalisation, skills-biased talent, and a maturing economy. On the other hand, we have businesses and workforces that also cater to the domestic market and the less-skilled population that have not been able to adapt. We are a society with also different make-up of abilities and interests. Thus, our productivity drive cannot be a "one-size-fits-all" approach and hope that the "other" economy will sort itself out, disappear or ends up overseas.

Over the years, globalisation and policies on tax, CPF and immigration – while necessary to increase competitiveness – may have also accentuated some of these divergent forces. We need to find more sustainable economic measures that can be provided to give the poorest workers a decent wage, which is depressed by the forces of free markets. Our Budget transfers have served us well and well-justified to support the Government's position against minimum wage. However, I fear that our reliance on this tool over the long term will create more stresses on the middle class, especially on basic needs of housing, healthcare, transport and education.

I move on to our local SMEs. I understand and agree that we have to continuously improve the productivity levels of our companies to stay competitive. I fully support the Budget's tightening on foreign manpower to give our citizens a better chance of employment and better wages. However, speaking to business owners, many SMEs are impacted by the increases in foreign manpower levies and, more so, the tightening of foreign labour.

It is one thing to say to let market forces decide, to determine the fate of our local businesses, be they in manufacturing, retail or food and beverage industries. But it is quite another thing to count the thousands of Singaporean jobs likely to be lost should these SMEs fail or move overseas to operate their businesses because they cannot be competitive here due to the high costs. It may be worthwhile to track among the listed Singapore companies, how many have already moved their core and administrative operations out of Singapore and is this trend on the increase?

Recently, a concern was raised when it emerged online that SMRT was still hiring bus drivers from China due to shortage of drivers. This raised the perception of double standards that the productivity drive imposed on SMEs and businesses were not applied as stringently across the board. In MOT's reply in Parliament earlier this month, SMRT and SBS employ close to 40% foreign bus drivers and this has been an upward trend in the past two years. Public companies such as SMRT and SBS should be the ones setting the standards – that the focus should be on giving local recruitment first priority and to put forth an attractive wage structure and job condition. I also agree with Member Seng Han Thong on the fact that we should look at the wages of our bus drivers and transport workers. After all, the Government is already putting $1.1 billion in new investment to co-finance the purchase of 800 new buses. Much effort is being put into transforming the security, landscaping and cleaning industries. This is a good opportunity to transform the public transport sector as well, to make jobs there more attractive for Singaporeans. And let us build more of such sectors from here on.

However, there are also some sectors which I think Singaporeans wish to continue to enjoy low-cost services. Productivity measures and foreign worker tightening are likely to mean that business cost increases will be passed on to consumers. Many are concerned about potential cost of living increases as a result. Sectors such as Food and Beverage and retail serve many Singaporeans. In fact, we commonly refer to shopping and food to be our national pastimes. So, there are many business owners in these sectors feeling the strain of not being able to recruit and not able to service clients effectively. Most are already impacted by rising rentals, and it is hard not to see these sectors being able to sustain and serve our local population at current cost.

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Sir, I would like to recommend that the Government also closely monitor the impact on foreign manpower tightening measures on the Food and Beverage (F&B) and retail sectors and review the rate of tightening on foreign manpower needs to be slowed. Price increases or the lack of affordable options will only serve to create more tensions as it impact services closest to the common Singaporeans. Mr Deputy Speaker, Sir, productivity is a function of output and costs. Our approach to productivity has always been about increasing business and workforce output. However, perhaps, the Government can enlighten us if we have also truly explored and put as much emphasis on reducing our costs – costs of living and costs of doing business here, which also translates to the expectation of costs of wages.

While Budget 2012 tries to balance the costs increase with schemes such as the PIC and other credits and grants. These are short-term measures and I cannot see them being sustainable without burdening taxpayers or drawing our reserves in the long term. What I fear most is if policymakers have made a foregone conclusion that prices can only go up – and that we have to find ways to subsidise the increases for the lower segments in the long term. I am particularly concerned for middle-income group and PMETs as they are bluntly impacted by cost increases and most of the times do not qualify for many of the subsidies. We cannot ignore the fact that they too need options to enjoy a decent standard of living in Singapore. It is also important to reduce financial burden and enhance affordability so that more in the different rungs of the social ladder can benefit from the wider economic pie. I hope that our policymakers also make it a priority to look at our economic structure to find areas where we can bring our costs down – especially in the areas of necessities such as housing, utilities, healthcare, education, transport. This will ease cost pressures and survival stresses on citizens and businesses. There are also long-term implications of our sense of security of our future here in Singapore.

Budget 2012 has given a number of benefits for the elderly, especially through the Special Employment Credit (SEC) and Silver Housing Bonus Scheme, which will help them unlock the savings in their homes, so as to boost retirement income. We have to recognise that more and more elderly these days cannot rely on their children to support them. Many of the Government's social assistance schemes abide by the principles that the family is the first line of support. But this assumption is changing. According to NCSS and MCYS, a 2005 study showed that only less than 50% or 44% of residents aged above 55 relied on their children for financial support, up from 64% in 1995. This downward trend is expected to continue.

The SEC is a move in the right direction to encourage employment of older Singaporeans, but there are also some practical realities that need to be considered. According to MOM's 2010 Labour Force report, about 61% of the number of elderly, or those aged 55 and above, are employed, but they were concentrated in the lowest income brackets of below S$1,500 a month. Even with more seniors rejoining the workforce, with their limited incomes, it is difficult for them to cope with the rising costs to maintain the standard of living that they have today in the future.

The mindsets of employers still have some way to go with regard to employing and creating the right working conditions for our seniors. Fortunately, the majority of Singapore's elderly own some assets. While the most common of these are savings and fixed deposits, their largest assets are the homes that they live in. The Silver Housing Bonus Scheme is a good move. But many elderly who own HDB flats tend to be less willing to uproot themselves and to downgrade into smaller flats in another area. Many of their children are also likely to have purchased flats nearby. We need to have a more flexible solution to help our seniors to retain a roof over their heads and at the same time enjoy "lifestyle security", over the next few years. While allowing the elderly to monetise or unlock value from their assets is a good move. However, as recently reported, today, the adoption of the Lease Buy-back Scheme has not been good. However, perhaps, the target segment to try this programme should have been different.

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In this regard, perhaps, the Government could consider extending this scheme to the owners of larger HDB flats, that is, the 4-room and larger HDB flats. The scheme should be made available for older Singaporeans in larger flats to monetise their needs. The existing position that larger flat owners can downgrade to monetise their assets involves high risks in market cycles and cash transactions. The Lease Buy-back Scheme is a safer, more rational alternative. The adoption of the Lease Buy-back Scheme may also be better among the middle-income population as the amounts monetised from larger flats are likely to be higher and the education profile of the flat owners may mean that they are better able to appreciate how the schemes will benefit them.

Raising taxes to allow more social spending on our ageing population is not sustainable, as it will burden taxpayers and erode our competitiveness. Thus, the Government should continue to adopt more creative solutions beyond taxation, to ease or enhance the cashflow of our seniors.

The development of a permanent low-income segment is a concern that affects all communities in Singapore. If this group do not see any social mobility in their livelihoods, they will lose confidence in their future as they sense no economic security for them. So, it is critical that our policies continue to help the less well-to-do Singaporeans in our society, and we should be ready to provide them with even greater support, especially the "big-ticket" items in life – for example, more housing subsidies for first-time homebuyers, childcare support, healthcare, education, especially tertiary. This will give them and their children a boost up in social ladder. This can also be positive social multipliers – as our people will then have a better sense of security, more commitment to raise their families here and willingness to contribute back to society.

Mr Deputy Speaker, Sir, we face new challenges which calls for a new social compact today for social sustainability. Addressing the interconnected challenges of the poor, stagnant wages, rising income disparity, lower social mobility, and a growing feeling of reduced well-being in this new environment will require not just policy tweaks. What we need is a broader, more holistic re-thinking of Singapore's economic and social policies to find the right balance between economic growth and social sustainability. If Singaporeans feel insecure for long, we will risk losing the faith of the people in our system. This will not be good for Singapore and can create even more social problems, deepen divisiveness and ultimately lead to permanent fissions in our social fabric. We have to think of what we want Singapore to be over the next 10, 20 years and it is important for the Government to work more proactively with its people to ensure socially desirable outcomes that meet the preferences and aspirations of all Singaporeans. Mr Deputy Speaker, Sir, I support the motion.

6.32 pm

Mr Seah Kian Peng (Marine Parade): Mr Deputy Speaker, Sir, I would like to ask about the Concept Plan 2011. Every 10 years, we have a collective look and we ask ourselves, what kind of Singapore would we like? In the past, this sort of question would have had fairly definite answers – in the long term, we will have this many people, we will aspire to the Swiss standard of living, and so on. We have aspirational goals defined in material, objective and realistic terms. Now, we do not quite have such a concept of Year X. Now, there are new rules and new paradigms. In fact, now Concept Plan 2011 does not appear in 2011! I am hoping that we will get to see it sometime in 2012. But of course, the question still remains – what kind of Singapore do we want? The answers are vastly different. More complex, more intriguing, yet in a way, more urgent than ever before.

Sir, each year, the Budget is the way for our country to put its money where its mouth is. To make real its dreams and vision, to make substantial commitments to plans and predictions. Budget 2012 has seen a significant shift of focus and approach to cover older Singaporeans, in particular, and to also include the middle-income group. As we push for inclusive growth, as we push to improve and increase the social mobility of all Singaporeans, we should not forget that we need to keep an eye out on growing our economy and ensuring as high an employment rate for all citizens, and in the process, strive to improve job and wage prospects for all. In laying out its vision for the concept, the Minister for National Development had pointed out five key ideas: economic growth opportunities; good quality living environment; an inclusive society where the needs of various sectors of the population are taken care of; a sustainable Singapore that balances growth with responsible environmental management and an endearing home where people have a strong sense of belonging to Singapore.

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In a sense, these five have always been the key issues for us – economy, work, happiness, prosperity, progress. But moving ahead, I ask the Government to consider three key changes that need to be taken into account for the future.

First, from optimal to being "good enough". I call this "satisficing". Sir, one key thing I feel we ought to do is to take a broader, more enlightened and tolerant stance in policy-making. It is the notion of "satisficing" rather than satisfying. Let us talk about floods, for example. One key piece of data provides perspective – our PUB has done an incredible job of reducing the flood-prone area from 3,200 hectares in the 1970s to 56 hectares today and only 40 hectares by next year. This means that only 0.0005% of Singapore, or an area the size of the Night Safari, is at risk of being flooded.

Now, how much risk is there of us being flooded? A typical risk matrix is that "risk will be defined as a combination of probability or likelihood and consequence", so for the Mathematicians: "Flood Risk = Probability of Flooding x Consequence of Flooding". In other words, high risk can occur either from frequent floods that have relatively limited consequences or from rare floods that have great consequences. The first are the sorts of floods in Singapore last year, wet stores and feet for half an hour in Orchard Road; and the second, far more disastrous, with severe costs in life and homes, such as the 2005 floods in New Orleans. It is true that Singapore may be "high risk" under this calculation but to just trust the final number without appreciating the type of risk is a mistake. Singapore may have a high probability of flooding, but with relatively small consequences. Surely, the preparedness – both in terms of infrastructure and psychology – needs to be different.

Sir, we might benefit from an alternative perspective, which is the need to increase citizen resilience. Given the random nature of floods and the near impossibility of total prevention, what level of protection do we want, and what level of discomfort can we tolerate? Is $750 million too high a price to be paid for what we went through last year? Singapore, of course, will have to be prepared to bear with something not quite the ideal. It is "satisficing" – a function of our imperfect knowledge and limited resources.

Roads are another area we need to review. A commentator, Eric Jaffe, wrote in an article for Atlantic Cities in December last year. He said, "Many designers size a road or intersection to be free-flowing for the worst hour of the day. Sized to accommodate cars during the highest peak hour, such streets will be €˜overdesigned' for the other 23 hours of the day and will always function poorly for the surrounding community." Sir, I am a driver, and I hate jams as much as the next man. Sometimes, I curse – quietly and to myself of course – that I wish there were wider roads. But I may have to accept that this is the price to pay for larger parks, for better homes, for larger trees and the fantastic biodiversity we have. Do we need to design roads that completely address the problem of congestion, or can we learn to live with some traffic jams, not too bad, not too long traffic jams during peak hours? Of course, we can have more roads, or we can have fewer cars. To me, the latter seems a better alternative. Perhaps, it is time for us to continue to tackle more on the oversupply of cars, rather than the undersupply of roads.

Second, from solving problems to negotiation. Sir, even as we recognise that there are increasingly tighter limits for decision making, the process of how decisions are reached must change. I must say that I admire the assorted "political watchers" and "pundits" out there who always seem to have a brainwave about how to tackle issues – while the rest of us, Opposition MPs included, we work the ground, we scratch our heads, we hold our residents' hands as we try and work through seemingly hopeless situations late into the night at our MPS. Some problems are really intractable. And once decisions are made, rules are set, the cost of opening up the discussion, of undoing what has been done – that is not easy. Sir, our policies are blunt instruments by and large – they do mostly good, but they can also be a little hard to a very few.

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Taking a very micro-view, mutual gains, negotiation effort, can help. For example, parking problems in any private estate. Let me relate what happened in one of the private estates in my constituency. Many residents were upset as parking spaces are limited, and whenever people try to sneak into an illegal spot, the Traffic Police are called and summonses are issued. Perhaps, it was due to intolerance, inconsiderate parking; perhaps, due to new residents who moved in and did not know other long-time residents well enough and so ties with community and neighbours there were not so strong. Perhaps, all that was needed was for everyone to seek to understand each other's perspectives.

What I did was to link them all up, engage all of them in some dialogues initially via email and eventually a face-to-face meeting with all of them at one of the owners' home. We shared openly the issues at hand, implored all to listen, to better appreciate and understand each other's perspectives – that really there was no right or wrong. But we all agreed that as a community, we could take the first and most important step to help solve our own local problems. So, we drew up a list of ground rules for these residents to agree and to adhere to. Now, calls to Traffic Police will only be made as a super last resort and also by the internal neighbourhood committee. We exchanged and collectively drew up this set of rules. We hope to implement these next month and we will in fact be having a street party soon amongst the residents there and I look forward to joining them at this street party next Saturday. The solution is really nothing new – I told them this was called "neighbourliness"!

I adopted the same approach with another group of residents in another private estate, also regarding parking issues about a year and a half ago. So far, the outcome has been positive and the neighbourliness spirit is better than before. Sir, we have a background set of rules and regulations designed for parking offences – but to enforce them, all the time without regard for nuances of relationships and interests at hand is unhelpful. Besides, if we call the Traffic Police out for every little disagreement, I can imagine the state of the Home Affairs' budget the next year!

Likewise, lift upgrading. Some flats were designed a long time ago, such that now to provide full lift access, it creates "problems" for others such as blocked views. So, in my case I again engaged each block of residents who are affected, had dialogues with them, explained and hoped. As a result, all of them have a better appreciation of the problem and the very difficult issues that confront the desire to provide full lift accessibility for all residents in their block. I have about eight such blocks requiring eight such sessions. In some cases, I had to have another two or three follow-up dialogues. Time-consuming no doubt but, to me and, I believe, to many others, necessary and useful. I do not know if it will all turn out well because they are all different and some are still pending but I think we all would want to work out some solution which will not satisfy everyone but which they will all hopefully understand. This is what I call "satisficing" – some satisfaction, some sacrifice. And I think by and large, we are understanding and reasonable when we are engaged and we have all the information needed to make a decision.

With this negotiation and open conversation concept, we can also make the point, without moralising, that Singaporeans can take ownership and responsibility for things which they are accountable for. It could be about pet ownership abandonment, leaving dog poo all over the place, leaving a disused bicycle in the void deck, high-rise littering, parking improperly or not giving way to the elderly. We make mistakes, we admit them, we apologise and we help each other along.

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My third and final point is about hard infrastructure and the limits of growth. Sir, the Singapore we want can be created in our minds and hearts, but the reality is still some 700 square kilometres we have to work with. Sir, the URA takes 6.5 million as a planning parameter. We are not yet at 6 million and already feeling the heat. We are cheek to jowl, and fighting and scrambling for what is yours or mine – jobs, homes, a seat on the bus or the train. At the same time, the "community" approach that has served us so well in the past may not work now – as we develop discrete and fragmented identities – it has recently, sometimes unfortunately become a zero sum game, in part borne by a sense of deprivation at the rising inequality. Sir, inequality is an insidious and creeping problem and I will address this more fully in my MCYS cut. In my mind, if we do not reduce this scourge, it will poison everything else that we do.

But for now, I want to concentrate on the notion of limits. Are we reaching the biophysical limits of growth and do we want to stop at a certain point? This is an important question because at the end of it all, we come back to the most important question: what kind of Singapore do we want? This Government through this Budget has made some significant moves and signal its intention to have more inclusive growth and build a more inclusive society. It is and will continue to be always work in progress.

The limits are biophysical as I have said, but in a sense they are also a function of the complexity of society today – not just in Singapore, but the world over. In the analysis of the Challenger tragedy in US, the Enron collapse and the recent Western financial crisis, we see the fragility of complex systems. They are what Yale Professor Charles Perrow call "normal accidents" – accidents caused by the way minor events interacted to produce major disasters.

"Normal" does not mean routine or frequent. It just means that it can occur within the normal functioning of a complex system. As journalist Malcolm Gladwell says, when accidents of this sort happen, there is "no one to blame, no dark secret to unearth, no recourse but to re-create an entire system in place of one that had inexplicably failed". Well, he is wrong about the lack of recourse, of course, because the most obvious and yet most difficult is to recalibrate our response to disasters.

Sir, I have spoken about the need for resilience as above. I was trying to come up with a figure – is $10 million enough to grow a stiff spine? Maybe $20 million, $30 million. $1 billion – the same amount we spend on a new Garden by the Bay? So, how do we ensure a good response to a crisis? Given what I said earlier about over provision, I really hesitate to name a figure.

Sir, the main reason for not having a figure is that this sort of policy needs to be embedded within many others. And I feel, in fact I know, we are going in the right direction with Budget 2012. For sure, there are still many moves and policy refinements and even overhauls that will come up, going forward. I have in my address highlighted some of the aspects that need to be studied in greater detail.

Sir, the kind of Singapore we want is a rationally imperfect, complex one, in which accidents will happen, and which satisfaction is mixed liberally with sacrifice. Sir, it is not a platonic world, but it is our home, and if no homes are perfect, at least ours will be one that is warm and safe; and where we are all part of a family. Sir, I support this Budget.

6.48 pm

Dr Teo Ho Pin (Bukit Panjang): Mr Deputy Speaker, I rise in support of the Budget. Sir, many Singaporeans have voiced support for this year's Budget. Many have called it an "inclusive Budget" targeted at restructuring our economy, helping the low-income and elderly Singaporeans. The Budget is indeed a step in the right direction to build an inclusive society and a stronger Singapore. However, the targeted approach in assistance always fails to fulfil the needs and aspirations of certain segments of our population. That is why we can still see media reports of SMEs and different groups of Singaporeans asking for more subsidies or assistance from the Government.

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Sir, a Budget which targets on helping certain segments of the population will always tend to make the rest feel "short-changed", thus resulting in unhappiness among Singaporeans. To address this unhappiness, I would propose to the Finance Minister to consider adding a "sharing" component in the Budget. Despite having attained an economic growth of 4.9% in 2011 and a budget surplus of $2.3 billion, there is no "Growth Dividend" to recognise the efforts of all Singaporeans.

Sir, may I ask the Finance Minister: (1) what is the purpose of the Growth Dividend?; (2) under what circumstances will the Government give out Growth Dividend?; and (3) why is no Growth Dividend given out to Singaporeans this year?

Sir, the Growth Dividend is a good mechanism for the Government to share our Budget surplus with Singaporeans regardless of age, income or the annual value of their property. In times of economic crisis, the Government encourages Singaporeans to take tough economic measures to cut costs. Therefore, when there is economic growth and budget surplus, there should also be Growth Dividend to recognise Singaporeans' contributions.

Sir, I support the permanent GST Vouchers to help lower income Singaporeans. At the same time, I would urge the Finance Minister to consider providing Growth Dividend to Singaporeans. In this way, it provides a fairer distribution of budget surplus to all Singaporeans while helping the lower income groups. This is what I would call the "share and care" approach for budgeting.

Sir, although the proposed Budget is inclusive, there is a lack of measures to promote a caring society where Singaporeans will care for one another and others. We need to build a strong economy. We need to build an inclusive society. But what is more important is to nurture more caring Singaporeans and Singapore companies.

Sir, I am heartened to read a letter in the Forum page in the Straits Times dated 24 February 2012 titled, "Thanks for saving my wife's life: SIA passenger". The professionalism and care shown by the SIA crew of Flight SQ 322 in saving a passenger's life is indeed commendable. Sir, we need more caring Singapore companies and more good Singaporean Samaritans to build a caring society.

Thus, I would urge the Finance Minister to consider the following suggestions to nurture caring Singapore companies and Singaporeans:

(1) Supporting firms which employ older Singapore workers. Sir, I support the Special Employment Credit (SEC) for older workers above 50 years old and the reduction of dependency ratio for foreign workers. But I am concerned that it will have undesirable side effects resulting in firms employing more "phantom older workers" to meet the reduced dependency ratio and profit from the SEC. Although the SEC may encourage more firms to retain or recruit older workers, it may not result in older workers getting better pay and employment terms. Furthermore, SMEs may not benefit much from the SEC as they do not employ many older workers. Therefore, I would urge the Finance Minister to consider adopting a two-tier SEC for SMEs and larger firms. A higher SEC for SMEs will give them a more level playing field and further incentivise them to provide more job opportunities for older Singaporeans.

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Sir, we can also help Singapore firms to take care of their older workers in two areas. First, we can increase the skills and pay of older workers through the companies. I would urge the Finance Minister to consider providing a Special Training Credit to encourage firms to send their older workers for continual skills upgrading. Second, we should provide more SEC for firms which employ older workers earning a basic salary of $1,000 or more. Sir, the SEC has an income ceiling of $3,000 but no minimum salary criteria to protect low wage older workers. As such, older workers may not be able to earn more.

Sir, I share the concern raised by the Finance Minister on the low wage of some Singaporean workers, especially cleaners. Over the last three years, the 14 PAP Town Councils spearheaded a Job Redesign Programme with NTUC to help raise the skills, productivity and wages of cleaners working in the Town Councils. At the start of the programme, we faced many challenges as cleaners were not well trained, their morale and salary were low, and cleaning firms were not keen to upgrade the skills of their workers. Furthermore, the wage of cleaners was often affected or suppressed by the competitive bidding for cleaning contracts.

Sir, to address these challenges, the Town Councils developed a three-pronged approach, namely: (1) redesign the tender specifications; (2) incorporate a performance evaluation system; and (3) modify our tender evaluation criteria for cleaning contracts. The changes help us to increase the skills of our cleaners, raise their productivity and salary. At the same time, cleaners are more motivated to provide better cleaning services to our residents.

Sir, I hope the Finance Minister will adopt a two-tier SEC and set a minimum salary criteria to help older Singapore workers get better salary.

(2) Supporting Corporate Social Responsibility and Philanthropy. Sir, to build a caring society, we need more successful companies and individuals to come forward to help the needy in our community. We should also encourage more start-ups of voluntary welfare organisations (VWOs), and incentivise more Singaporeans to make donations to help the sick and needy in our society. Sir, at this juncture, let me share with Members the experience of North West CDC in encouraging companies and individuals to make monthly donations of at least $100 per month to help our needy.

In May 2008, North West CDC started the Club-100 @ North West to foster philanthropy spirit among Singaporeans. We identified a cause for the donations and conveyed the message that all donations will go towards the North West Food Aid Fund which provides food rations and vouchers to over 700 needy households monthly. To date, we are pleased to report that Club-100 @ North West has 300 members, contributing half a million dollars a year to help our needy.

Sir, the Government can do more to encourage corporate social responsibility and philanthropy. Besides providing the 2.5 times income tax exemption, I would urge the Government to provide a one-to-one matching grant subject to a certain cap for donations made to VWOs with Charity or IPC status. At the same time, the Government can be a VWO venture capitalist to provide seed money for VWO start-ups. More tax exemption can also be provided to encourage individuals to make monthly donations. The returns for such investment will be a more caring society with many helping hands.

(3) Supporting 3Ps efforts to build a caring community. Sir, the building of a caring community requires the efforts of the 3Ps (Public, Private and People) sectors. We must continue to encourage more initiatives by the 3Ps to spearhead "Caring Community" programmes or services. The Government, business community and our people must take ownership to achieve the same desired outcome − a caring community where Singaporeans will take care of one another.

Sir, the CDCs can serve as a useful channel to match 3Ps projects in the community. The experience of the CDCs in identifying the needs of the community will ensure better outcomes for 3Ps projects. In this aspect, I hope that the Government will allocate resources and initiate more 3Ps projects to strengthen the partnership of the 3Ps. This will build capabilities in the community and sustain more community programmes and services.

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Sir, nurturing more caring Singaporeans and promoting socially responsible businesses will definitely add more happy hours to the lives of Singaporeans.

Mr Deputy Speaker: Order. Deputy Prime Minister and Minister for Finance, resumption of debate, what day?

The Deputy Prime Minister and Minister for Finance (Mr Tharman Shanmugaratnam): Tomorrow, Sir.

Mr Deputy Speaker: So be it.